U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                 FORM 10-KSB
(Mark One)
 [X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

      For the fiscal year ended September 30, 2005
 [ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

      For the transition period from _____. to ___..__

                      Commission File Number: 000-26740

                         AMERICAN HEALTHCHOICE, INC.
                (Name of small business issuer in its charter)

             New York                                       11-2931252
   (State or other jurisdiction                           I.R.S. Employer
 of incorporation or organization                       Identification No.)

    7350 Hawk Road, Flower Mound, Texas                        75022
 (Address of principal executive offices)                    (Zip Code)

                     Issuer's telephone number: (972) 538-0122

            Securities registered pursuant to Section 12(b) of the Act:

      Title of each class           Name of each exchange on which registered
             None                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                   COMMON STOCK, PAR VALUE $.001 PER SHARE
                               (Title of class)

      Check whether the issuer (1) filed all reports required to be filed  by
 Section 13 or 15(d) of the  Exchange Act during the  past 12 months (or  for
 such shorter period that the registrant was required to file such  reports),
 and (2) has been subject to such  filing requirements for the past 90  days.
 Yes [x] No [ ].

      Check if disclosure  of delinquent filers  in response to  Item 405  of
 Regulation S-B is  not contained  in this form,  and no  disclosure will  be
 contained, to the  best of registrant's  knowledge, in  definitive proxy  or
 information statements incorporated by  reference in Part  III of this  Form
 10-KSB or any amendment to this Form 10-KSB. [X]

      Check whether the issuer is a shell company  (as defined  in Rule 12b-2
 of the Exchange Act).  Yes [ ]  No [X]

      State issuer's revenues for its most recent fiscal year: gross  revenue
 $11,100,000; net revenue $6,600,000

      State the aggregate market  value of the  voting and non-voting  common
 equity held by non-affiliates  computed by reference to  the price at  which
 the common equity  was sold, or  the average bid  and asked  prices of  such
 common equity,  as  of  a specified  date  within  the past  60  days.  (See
 definition of affiliate in Rule 12b-2 of the Exchange Act). $3,200,000 as of
 December 31, 2005*.

                        (ISSUERS INVOLVED IN BANKRUPTCY
                    PROCEEDINGS DURING THE PAST FIVE YEARS)

      Check whether the issuer has filed  all documents and reports  required
 to be  filed by  Section 12,  13 or  15(d)  of the  Exchange Act  after  the
 distribution of securities under a plan confirmed by a court. Yes [X] No [ ]

                  (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

 State the number of  shares outstanding of each  of the issuer's classes  of
 common equity, as of the latest practicable date:

 As of December 31, 2005, the Registrant had 110,970,759 shares outstanding
 of common stock and 13,875 shares outstanding of Series B preferred stock.

   *  Based on  the  last  reported  price  of an  actual  transaction  in
      Registrant's common  stock  on  December  31,  2005 and  reports  of
      beneficial ownership filed  by directors  and executive  officers of
      Registrant  and  by  beneficial  owners  of  more  than  5%  of  the
      outstanding shares  of  common stock  of  Registrant; however,  such
      determination of shares owned  by affiliates does not  constitute an
      admission of affiliate  status or beneficial  interest in  shares of
      Registrant's common stock.

                    DOCUMENTS INCORPORATED BY REFERENCE
                                   None

                  Transitional Small Business Disclosure
                            Format (Check one)
                             Yes [ ]      No [X]

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.

                                FORM 10-KSB

                             TABLE OF CONTENTS

                                                                       Page
                                                                       ----
                                 PART I

 Item 1.   Description of Business..................................     1

 Item 2.   Description of Property..................................     3

 Item 3.   Legal Proceedings........................................     4

 Item 4.   Submission of Matters to a Vote of Security Holders......     4



                                PART II

 Item 5.   Market for Common Equity and Related Stockholder Matters.     4

 Item 6.   Management's Discussion and Analysis or Plan of Operation     5

 Item 7.   Financial Statements.....................................    14

 Item 8.   Changes In and Disagreements with Accountants
             on Accounting and Financial Disclosure.................    26


                                   PART III

 Item 9.   Directors, Executive Officers, Promoters and Control
             Persons; Compliance with Section 16(a) of the
             Exchange Act...........................................    27

 Item 10.  Executive Compensation...................................    29

 Item 11.  Security Ownership of Certain Beneficial
             Owners and Management..................................    33

 Item 12.  Certain Relationships and Related Transactions...........    34

 Item 13.  Exhibits and Reports on Form 8-K.........................    35

 Signatures     ....................................................    38

<PAGE>

                                 PART I


 ITEM 1. DESCRIPTION OF BUSINESS

 General

      American HealthChoice,  Inc. (the  "Company") is  a medical  sales  and
 service company established in 1994 headquartered in Flower Mound, Texas,  a
 suburb of Dallas.  Its common stock is quoted on the OTCBB under the  symbol
 "AMHI".  The Company owns three business divisions:

   *   Medical Clinics
   *   TelmedCo
   *   RehabCo

      The address of the Company's principal office is 7350 Hawk Road, Flower
 Mound, Texas 75022. The Company's telephone number is (972) 538-0122 and its
 fax number  is (972)  538-0131.   The  Company has  an internet  website  at
 www.americanhealthchoice.com.

      At September 30, 2005, the Company had 65 full-time employees.

 Medical Clinics

      This Texas based medical service company operates medical clinics.   As
 of December 31, 2005, the Division had 13 company-owned clinics in Texas and
 approximately 30 clinics in its Affiliated Clinic Program located in  Texas,
 Tennessee and Kansas.  The  current annual  run  rate  for patient  billings
 exceeds $12 million.  For the three months ended September 30, 2005, patient
 billings for affiliated clinics  comprised 20% of  total  patient  billings.
 Management plans to continue  adding new affiliated clinics  at the rate  of
 two per month in fiscal 2006.

      In June  2003, the  Medical Clinics  Division initiated  an  Affiliated
 Clinic Program whereby  it has a  contractual relationship with  established
 clinics owned and/or operated  by individual doctors.   Under this  program,
 patients are directed  to these clinics  from established marketing sources.
 The Division reports patient billings as revenue and then pays the  treating
 doctor a contracted  amount.  The  primary financial  benefit is  additional
 operating income without new fixed costs such as employee salaries or office
 rent.  The arrangement is equally attractive to the treating doctor  because
 of the increased number of patients and the resulting increased income.

      The Division's  strategic  business  model for  its  Affiliated  Clinic
 Program has two components.   First, a medical  clinic owned by a  physician
 with an established patient base and experience in treating personal  injury
 and workers compensation patients.   Second, multiple marketing resources to
 direct prospective patients to the clinic.   Through June 2004, the  Company
 added approximately 15 Texas clinics to the Affiliated Clinic Program.   The
 annual patient billings range from $200,000 to $600,000.  Total billings  in
 fiscal year 2005 were  approximately $1,500,000 for these  clinics.  Two  of
 these clinics were recently acquired and converted to company-owned clinics.

      In August 2005, the Division established five new affiliated clinics in
 the Nashville, Tennessee area.  To date, billings have exceeded expectations
 with an  annual  run rate  of  approximately  $600,000.   The  average  case
 settlement thus  far  has been greater  than  similar  cases  at  the  Texas
 clinics.  In December 2005,  a  clinic located in Kansas City, Kansas joined
 the program.

      In fiscal 2006, the growth strategy for the company-owned clinics is to
 continue  expanding  the  number  of  patients  and  increase  the   average
 settlement amount on cases.   In this regard,  major attorneys working  with
 the Texas clinics have agreed to  increase the percentage of the total  case
 settlement amount paid to the medical providers of which the Medical Clinics
 Division  is  the  largest.  In addition,  Management  plans on  adding  new
 affiliated clinics at the rate of two  per month.  Lastly, the Division  may
 acquire two established medical  clinics in Texas  with patient billings  in
 excess of $3,000,000 on an annual basis.

 TelmedCo

      TelmedCo was  formed  in June  of  2005 to  embrace  the  revolutionary
 technology  of Telemedicine  and  to provide second opinions to patients  of
 the Medical  Clinics Division.  Currently TelmedCo  provides second opinions
 to  company-owned  and  affiliated  clinics as well  as four clinics outside
 the  Division's  network.   As  of  September  30,  2005   TelmedCo   had  8
 Production systems  in place.  In December of 2005 TelmedCo put in place the
 infrastructure to expand into Tennessee.   This will bring the total  number
 of systems to 14 production and two test systems. TelmedCo will continue  to
 expand in Texas and Tennessee as well as in other states.

      Telemedicine is the use of technologies such as video conferencing  and
 electronic medical  devices, combined  with medical  practices, and  medical
 specialists that are organized and connected to provide health care services
 over telecommunications  network to  patients that  are separated  from  the
 doctors by distance.   TelmedCo's Telemedicine solution provides  healthcare
 to  patients   by  utilizing   digital  technology,   including   electronic
 stethoscopes, ophthalmoscopes  and otoscopes,  which virtually  connect  the
 patient to the doctor.  The initial roll out using this emerging  technology
 has been  among company-owned  and affiliated  clinics  as well  as  clinics
 outside the American HealthChoice umbrella.   The revenue stream comes  from
 second opinions provided by physicians of the Medical Clinics Division.

      The  Company  hired  Peter D. Leonard  as  president  of  TelmedCo.  In
 addition to locating new sites and coordinating the installation of systems,
 Mr. Leonard will implement the business plan to include penetration into new
 markets for Telemedicine.

      TelmedCo is pursuing the following markets as growth initiatives in the
 next couple of years as acceptance and government regulations are updated to
 embrace the use of Telemedicine in everyday applications:

        *  Expanding  TelmedCo's  existing  base  of  clinics  in  Texas  and
           Tennessee as well as exploring expansion to other states.

        *  Initiating the  use  of telemedicine  in  Pharmacies.   This  will
           provide growth  opportunities to  the Pharmacies  as they  provide
           medical services to the consumer.

        *  School District TeleMedicine Program  where school nurses will  be
           able to  respond  to  illness and  injuries  and  monitor  chronic
           conditions such as juvenile diabetes and asthma.  This market  has
           proven to save money, keep students in school and save parents the
           hassle of missing work and spending time in a doctor's office.

        *  Exploration of telemedicine in the home healthcare industry.   The
           current telemedicine  solutions provide  monitoring services,  but
           TelmedCo will offer the ability to  respond to the patients  needs
           and provide  follow-up visits  without traveling  to the  doctor's
           office.

        *  Growth into third world countries serving patients with disposable
           income that desire medical advice from U.S. Specialists.

        *  Expand into  the  business  and  industry  sector  thereby  giving
           patients the ability to visit a  physician during work hours  thus
           reducing absentee hours.

 TelmedCo has an internet website at www.Telemedco.com


 RehabCo

   On  March  7,  2005, RehabCo,  Inc.,  a  wholly-owned  subsidiary  of  the
 Company, acquired certain assets of Axiom Marketing Group, Inc.  Axiom was a
 distributor of medical equipment,  including spinal decompression systems.
 The acquisition was accounted for under the purchase method of accounting.
 On June 30, 2005, the Company terminated the agreement to acquire the assets
 of Axiom Marketing Group, Inc.

 For the twelve months ended September 30, 2005, RehabCo sold and  recognized
 commission revenue on  the sale of  approximately five spinal  decompression
 systems.

 Management is in  the process of  implementing a revised  business plan  for
 RehabCo to include the sale and  rental of spinal decompression systems  and
 other medical  products including  dry-hydro  therapy, laser  therapy,  bone
 densiometry and  medical thermography.   The  Company has  identified a  new
 management team and expects the first sales of medical equipment in  January
 2006.

 RehabCo has an internet website at www.Rehabco.com


 ITEM 2. DESCRIPTION OF PROPERTY

      The Company leases  approximately 1,500 square  feet in  a building  in
 Flower Mound, Texas  at a monthly  rent  $2,600 for use as its headquarters.
 The Company currently owns a parcel of land in San Antonio, Texas, on  which
 the Company's Southcross clinic is located.

      The  Company'  Medical  Clinic  Division  owns,  operates  and  manages
 thirteen clinics.  The following table lists the clinics, locations, monthly
 rents, services provided, and  date acquired or  commenced operation by  the
 Division.


 Clinics in Operation                   Monthly                     Date
   in Fiscal 2005       Location        Rent     Services Provided  Acquired
 ---------------------  --------------  -------  -----------------  ---------
 United Chiropractic    Katy, TX         $4,200  Medicare care,     October
 Clinic                                          Chiropractic &     1994
                                                 physical therapy

 United Chiropractic    San              $2,600  Chiropractic &     July
 Clinic (Wurzbach)      Antonio, TX              physical therapy   1994

 United Chiropractic    San              $1,100  Chiropractic &     October
 Clinic (San Pedro)     Antonio, TX              physical therapy   1994

 Atlas Sports & Injury  San              $1,100  Physical therapy   October
 (Bandera)              Antonio, TX                                 1994

 United Chiropractic    San              $2,100  Chiropractic       October
 Clinic (Bandera)       Antonio, TX                                 1994

 San Pedro Medical      San              $1,100  Primary medical    October
 Clinic                 Antonio, TX              care               1994

 Southcross Medical     San              $2,000  Urgent & primary   December
 Clinic                 Antonio, TX              medical care       1995

 United Chiropractic    San              $1,200  Medical care,      August
 (Naccogdoches)*        Antonio, TX              Chiropractic &     2005
                                                 physical therapy

 Valley Family Health   McAllen, TX      $3,000  Medical care,      January
 Center                                          Chiropractic &     1996
                                                 physical therapy

 Valley Family Health   San Benito,      $1,100  Medical care,      September
 Center                 TX                       Chiropractic &     2000
                                                 physical therapy

 Mid Valley Wellness    Weslaco, TX      $2,500  Medical care,      July
 Center                                          Chiropractic &     2005
                                                 physical therapy

 Crosstown              Corpus           $1,000  Medical            September
 Chiropractic Clinic    Christi, TX              care,Chiropractic  2000
                                                 & physical
                                                 therapy

 Laredo Family Health   Laredo, TX       $4,200  Chiropractic &     September
 Clinic                                          physical therapy   2000
                                         ------
 Total rent                             $27,200
                                         ======


 ITEM 3. LEGAL PROCEEDINGS

      As of September 30, 2005, there  are no legal proceedings that  involve
 material amounts of exposure for the Company.


 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      No matters to report


                                PART II


 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Market Information. The  Company's common stock  is quoted  on the  OTC
 Bulletin Board under the symbol "AMHI".

 The following table presents the high and low bid prices for each quarter:

                  Quarter Ended        High Bid   Low Bid
                  -----------------    --------   -------
                  December 31, 2003     $0.05      $0.01
                  March 31, 2004        $0.02      $0.01
                  June 30, 2004         $0.02      $0.01
                  September 30, 2004    $0.06      $0.01
                  December 31, 2004     $0.09      $0.03
                  March 31, 2005        $0.20      $0.07
                  June 30, 2005         $0.13      $0.05
                  September 30, 2005    $0.09      $0.06

      Holders.   Based  on information  provided  by the  Company's  transfer
 agent, the Company  had approximately 100  holders of record  of its  common
 stock at September 30, 2005.

      Dividends.  The Company paid no cash dividends since its inception, and
 it is unlikely  that any cash  dividends will be  paid in the  future.   The
 declaration in the  future of any  cash or stock  dividends will  be at  the
 discretion of the Board  of Directors depending  upon the earnings,  capital
 requirements  and  financial  position  of  the  Company,  general  economic
 conditions and other pertinent factors.  There are no dividend  restrictions
 in any creditor or other agreement to which the Company is a party.


 ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

 Overview

   For fiscal year  2005 and the two  previous years, billings from  patients
 treated at the medical clinics have  been the primary source of revenue  for
 the  Company.  Management  has  identified  the  following  key  performance
 measures:

   *  Number of patients
   *  Billings and collections
   *  Collections as a percentage of billings
   *  Days from billing to collection

   Based  on  data  accumulated internally  and  from  outside  sources,  the
 Company derives a greater amount of billing per visit from patients  treated
 in connection with personal injury cases than from other types of  patients.
 Therefore,  the Company has focused its attention on increasing the billings
 and collections from this  revenue source.  In  addition to the above  cited
 performance measures, the following have been identified for personal injury
 cases:

   *  Average billings per case
   *  Amount of payment to medical providers in relation
      to total settlement amount
   *  Collections by attorney

   Number of patients - During fiscal 2005, the Company increased the  number
 of patients treated at its company-owned clinics through improved  marketing
 of personal  injury  cases and  from  new  patients treated  on  the  spinal
 decompression systems at its Katy clinic.  The number of patients treated at
 affiliated clinics increased due primarily to the addition of new clinics to
 the program.   For fiscal 2006,  Management anticipates that  the number  of
 patients treated at company-owned clinics will increase compared to the same
 period in the previous year.  In this regard, the Company has added a second
 manager to coordinate marketing  efforts at the  individual clinics and  has
 installed  an  additional  spinal decompression system at its Bandera clinic
 in San Antonio.  In  September 2005,  the Company  had  20  clinics  in  its
 affiliated program compared to 7 clinics  in September 2004.  For the  three
 months ended September  30, 2005,  patient billings  for affiliated  clinics
 were $553,000, which comprised  20% of total  patient billings.   Management
 plans to continue adding new affiliated clinics at the rate of two per month
 in fiscal 2006.  In addition, the Company will pursue new clinics in  states
 other than Texas.

 Billings and Collections- Management  receives weekly reports from  company-
 owned clinics, which  detail patient  billings, collections,  number of  new
 patients and average billing per visit.   Monthly reports are received  from
 the affiliated clinics, which detail patient  billings and collections.   In
 addition, the Company monitors the number of patients referred by the clinic
 to law  firms and  the number  of  patients referred  by  law firms  to  the
 clinics.  During fiscal 2006, the Company intends to implement a new patient
 billing and collection reporting system  for affiliated clinics and  enhance
 the current reporting system for company-owned clinics.  Management believes
 these changes will provide new  information necessary to effectively  manage
 the revenue growth.

 Collections  as  a  percentage  of  billings-Since  2000,  one  of  the  key
 performance measures for Management has  been the relation between  billings
 and collections on settled cases expressed as a percentage.  In fiscal  2005
 this measure was 60% compared to 55% in fiscal 2004.  The primary reason for
 this improvement was  a greater  number of  personal injury  cases in  2005,
 which have  a  higher collection  percentage.   Management  anticipates  the
 percentage should continue  to increase in  2006 as a  result of  additional
 improvement in the  collection percentage for  personal injury  cases.   The
 goal of Management is to achieve a 65% collection rate in fiscal 2006.

 Days from billing to collection - For major medical and worker  compensation
 patient billings,  a detail  listing of  charges is  sent to  the  patient's
 insurance carrier after each  patient visit.  In  the case of major  medical
 claims, payment is normally received within 60 days after the patient visit.
 Worker compensation claims are  also normally paid within 60 days unless the
 insurance company  questions the  medical necessity  of the  charges by  the
 clinic.  In these cases, the person responsible for patient billings in  the
 clinic communicates  with  the  insurance company  to  evidence  of  medical
 necessity  including  notes   from  the  treating  physician.   In  a  small
 percentage of cases, the clinic may  not receive payment until 1 year  after
 treatment.  If a clinic is not  successful in collecting on large cases,  it
 will  engage  an  outside  firm   that  specializes  in  collecting   worker
 compensation claims and is paid a percentage of collections.

   The  days from  billing to  collection for  personal injury  cases can  be
 separated into three segments.  The first period,  during which the  patient
 receives treatment at  the clinic,  averages 45 days.   This  is the  period
 during which the clinic  records patient billings  as revenue for  financial
 reporting.   After  treatment  is completed  and  the  doctor  releases  the
 patient, the treating clinic prepares a final billing statement and  submits
 it along with patient  treatment narratives completed by  the doctor to  the
 patient's attorney.  This second period, referred to as the claim submission
 process, averages 30 days.  The attorney then submits a demand letter to the
 insurance carrier that accepted liability for the accident.  In most if  not
 all cases, the insurance carrier offers a settlement significantly less than
 the claim amount in the demand letter.   On average, the attorney reaches  a
 compromise settlement amount on 80% of demand letters submitted to insurance
 carrier or claim service  companies representing smaller insurance  carriers
 that do not have internal claim processing departments.  This final  period,
 referred to  as the  claim resolution  process,  averages 120  days.   If  a
 compromise can not be reached with the responsible carrier, the attorney may
 pursue remedy for the patient through a civil lawsuit.  A lawsuit may extend
 the time period for  collection to one year  or more.   In fiscal 2005,  the
 Company collected approximately 50% of its personal injury cases within  120
 day of  submission of  the treatment  narrative to  the attorney.   In  2006
 Management has set a goal to collect 60% of cases within 120 days.

 Average billings per case - For personal injury  cases  the average billings
 per case is  an important measurement because  an increase  in  the  average
 generally results in a corresponding increase in operating income.  Based on
 internal and industry analysis,  there is a  direct correlation between  the
 amount of  property  damage  to the  patient's  vehicle  and  total  medical
 billings for a  case.   In fiscal  2005 the  average billings  per case  was
 approximately the same as 2004.  Management  has set a goal to increase  the
 average by 10% in fiscal 2006.

 Amount of  payment to  medical providers  in  relation to  total  settlement
 amount-A settlement  in  a personal  case  normally has  payments  to  three
 parties; the medical providers,  attorney and patient.   For the last  three
 years, Management  has requested  attorneys to  pay the  medical  providers,
 including the  Company's  clinic,  50% of  the  total  settlement  with  the
 difference paid to the patient for pain and suffering and to the attorney as
 a fee  for representing  the patient.   During  2005, approximately  75%  of
 settlements were paid  using these criteria.   In fiscal  2006, the goal  of
 management is to increase the percentage to 60%.

 Collections by attorney - The Company  measures the performance of attorneys
 using three criteria:  collections as a  percentage of  billings, amount  of
 payment to medical providers in relation  to total settlement and days  from
 narrative to settlement.  In fiscal  2005 approximately 80% of the  personal
 injury cases were settled by five Texas attorneys who represent patients  at
 multiple clinics.  The Company provides monthly performance reports to these
 attorneys and will direct  additional patients over a  period of time to  an
 attorney with superior performance criteria.   The Company will continue  to
 monitor attorney performance in fiscal 2006.


 Results of Operations

      The following  summary  of results  of  operations should  be  read  in
 conjunction with the Company's  Consolidated Financial Statements and  Notes
 thereto included elsewhere in this document.


                                           Years Ended September 30,
                                           -------------------------
                                     2003             2004            2005
                                  ----------       ----------      ----------
 Revenues:
   Patient Billings:
   Company-owned clinics          $8,118,000       $8,729,000      $8,710,000
   Affiliated clinics                 57,000          885,000       1,642,000
   Spinal decompression systems            -          127,000         743,000
                                  ----------       ----------      ----------
     Total Patient Billings        8,175,000        9,741,000      11,095,000
   Allowance for discount
     on billings                   3,652,000        4,478,000       4,597,000
                                  ----------       ----------      ----------
     Net Patient Billings          4,523,000        5,263,000       6,498,000
   Equipment Rental and Sales              -                -          81,000
                                  ----------       ----------      ----------
     Net Revenues                  4,523,000        5,263,000       6,579,000

 Operating Expenses:
   Compensation and benefits       2,938,000        2,733,000       2,894,000
   General and administrative      1,031,000        1,067,000       1,290,000
   Marketing and advertising         949,000        1,151,000       1,270,000
   Affiliated clinic
     management fees                  24,000          179,000         362,000
                                  ----------       ----------      ----------
     Total Operating Expenses      5,242,000        5,130,000       5,816,000
                                  ----------       ----------      ----------
   Operating Income (Loss)          (419,000)         133,000         763,000


 Fiscal year ended September 30, 2005 Compared to Fiscal year ended September
 30, 2004

      Company-owned Clinic Patient Billings.  For fiscal year 2005,  billings
 at Texas  clinics  increased  $606,000 compared  to  fiscal  year  2004  due
 primarily to more personal injury case  patients.  The 2004 period  included
 $625,000 in billings for the New Orleans clinic with no comparable amount in
 the 2005  period due  to the  sale of  the clinic  in September  2004.   The
 average billing per case was materially the same in 2005 compared to 2004.

      Affiliated clinic patient  billings.   For fiscal  year 2005,  billings
 increased $757,000 compared to  fiscal year 2004 due  primarily to a  larger
 number of clinics.  During fiscal 2005 the Company added ten clinics to  the
 program and  two clinics  were  acquired in  August  2005 and  converted  to
 company-owned clinics.

      Spinal decompression system  patient billings.   For fiscal year  2005,
 billings increased $616,000  compared to fiscal  year due  primarily to  one
 system installed at  the Katy clinic  for twelve months  in 2005 versus  two
 months in 2004.

      Allowance  for  Discount  on  Billings.   For  fiscal  year  2005,  the
 allowance increased $119,000 compared to fiscal year 2004.  $580,000 of  the
 increase is attributable to the increase  in patient billings of  $1,394,000
 offset by a $461,000 downward adjustment in the allowance as a percentage of
 billings from 46% in fiscal  2004 to 41.5% in  fiscal 2005.  The  adjustment
 reflects a  decrease in  the percentage  for  discounts on  personal  injury
 cases.

      Compensation and  Benefits.   For fiscal year  2005,  compensation  and
 benefits increased $161,000 compared to 2004.  Compensation and benefits  at
 Texas clinics increased  $145,000, which was  due to  increases in  doctor's
 compensation attributable to  higher collections at  clinics.   Compensation
 and benefits were $71,000 for RehabCo  and $96,000 for Telemedicine with  no
 comparable amount in the 2004 period.  The increases were offset by $282,000
 for the New Orleans clinic in the  2004 period with no comparable amount  in
 the 2005 period.  The number of employees at the Texas clinics  increased by
 6 in 2005 compared to 2004.

      General  and  Administrative.   For  fiscal  year  2005,  general   and
 administrative increased $223,000 compared to 2004.  Legal and  professional
 expense increased $45,000 due  primarily to legal  fees incurred in  matters
 where  the Company is  the plaintiff.  Investor relations expense  increased
 $80,000 compared to fiscal year 2004 and travel expense increased $45,000.

      Marketing  and  Advertising.   For  fiscal  year  2005,  marketing  and
 advertising increased  $119,000 compared  to  2004.  The  10%  increase  was
 greater than the 8% increase in patient billings in the 2005 period compared
 to the 2004 period because patient billings for the 2005 period had a larger
 percentage of personal injury cases, which carry higher marketing  expenses.
 As  discussed above under allowance for discount on billings, the collection
 percentage on personal  injury cases is  greater than  major medical  cases,
 which partially  mitigates  the higher  marketing  expense.   Marketing  and
 advertising expense as a percentage of  patient billings was comparable  for
 both periods.

      Affiliated Clinic Management  Fees.  For  fiscal year 2005,  affiliated
 clinic management  fees  increased  $183,000  compared  to  2004  due  to  a
 corresponding increase in affiliated clinic patient billings.


 Fiscal year ended September 30, 2004 Compared to Fiscal year ended September
 30, 2003

      Company-owned clinic patient billings.  For fiscal year 2004,  billings
 increased $611,000  compared  to fiscal  year  2003 due  primarily  to  more
 personal injury case patients at the Texas clinics.  The average billing per
 case was materially the same in 2004 compared to 2003.

      Affiliated clinic patient  billings.   For fiscal  year 2004,  billings
 increased $828,000 compared to  fiscal year 2003 due  primarily to a  larger
 number of clinics.  During fiscal 2004 the Company added six clinics to  the
 program.

      Allowance  for  Discount  on  Billings.   For  the  fiscal  year  2004,
 allowance for discount  on billings  increased $826,000  compared to  fiscal
 year 2003.   $700,000 of  the increase is  attributable to  the increase  in
 patient billings  in the  amount of  $1,566,000 and  $126,000 to  an  upward
 adjustment in the allowance as a percentage of patient billings from 45%  in
 the 2003 period  to 46%  in the  2004 period.   The  adjustment reflects  an
 increase in the estimate for amount of personal injury cases written off  in
 the 2004 period due primarily to  the attorney dropping the client for  lack
 of insurance coverage.  The collection percentage on cases that were settled
 by  patient's  attorneys  in  2004  compared  to  2003  was  not  materially
 different.

      Compensation  and  Benefits.  For fiscal  year 2004,  compensation  and
 benefits decreased  $206,000 compared  to 2003.  The decrease  is  primarily
 attributable  to  stock  compensation  in  connection  with  the  employment
 agreement for the president and  CEO in the amount  of $150,000 in the  2003
 period.  The  number of employees  at the clinics  and corporate office  was
 unchanged in 2004 compared to 2003.

      General  and  Administrative.   For  fiscal  year  2004,  general   and
 administrative increased  $36,000 compared  to  2003.  Due  to  the  related
 increase in revenue, management fees  attributable to patient billings  from
 affiliated clinics were $179,000 in the  2004 period compared to $24,000  in
 the 2003 period.  Legal and  professional expense increased from $84,000  in
 the 2003 period  to $120,000 in  the 2004 period  due primarily to  investor
 relation expenses.  In addition, depreciation expense increased from $41,000
 in the  2003  period  to  $61,000  in  the  2004  period  due  primarily  to
 acquisition of clinic equipment.

      Marketing and Advertising.   For the  fiscal year  ended  September 30,
 2004,  marketing  and  advertising  increased  from  $949,000  in  2003   to
 $1,151,000 in 2004.  The 21% increase  is comparable to the 19% increase  in
 patient billings in the 2004 period compared to the 2003 period.   Marketing
 and advertising expense as a percentage  of patient billings was  comparable
 for both periods.


 Liquidity and Capital Resources

      For the  year ended  September 30, 2005,  net  cash used  in  operating
 activities was $219,000.  The primary reason for the difference between  net
 income of $610,000 and net cash used in operating activities of $219,000 for
 the year ended September 30, 2005 was a $1,210,000 increase in net  accounts
 receivable.  The following schedule lists the source of funds, which enabled
 the Company  to meet  current obligations  for the  2005 fiscal  period  and
 mitigate the  effect  on working  from  the material  increase  in  accounts
 receivable:

      (1) Net proceeds from notes payable to insiders:           $325,000
      (2) Deferral of payment to insiders including office rent   123,000
      (3) Deferral of interest payments on acquisition note        55,000
      (4) Sale of accounts receivable under factoring agreement   175,000
                                                                 --------
             Total                                               $678,000
                                                                 ========
      Notes:

    (1) In  April 2005  the President  and  CEO loaned  the Company  $100,000
        from  the  proceeds of the sale  of 1,000,000 shares of common stock.
        In  September  the  Company  made  a  repayment  of  $35,500  to  the
        President and  CEO.  Mainstream  Enterprises, an LLC  owned 50% by  a
        holder of more  than 5% but less than  9.99% of the Company's  common
        stock and the President and CEO of the Company, advanced the  Company
        $88,000 in  short term  loans using  proceeds from  sales of  930,000
        shares  of common  stock.   The  more  than 5%  holder  advanced  the
        Company $137,500 using proceeds from the sale of 1,436,500 shares  of
        common stock.

    (2) Includes deferred  office rent and salary due the President and  CEO
        of approximately $90,000.

    (3) Accrued interest at 8% due on $837,500 acquisition note.

    (4) On  April 21, 2005,  AHC Chiropractic Clinics,  Inc. entered into  a
        purchase agreement with  Northern Healthcare Capital to sell  patient
        accounts receivable at a  discount from its Katy and Laredo  clinics.
        The maximum amount available is $400,000.

      For fiscal  2005  approximately 80%  of  net revenue  is  comprised  of
 projected collections of  personal injury  case settlements.   As  discussed
 earlier,  Management  has  established  procedures  to  monitor  and  report
 collections from this primary source of cash.  The success of the Company is
 dependent upon timely  collections of  personal injury  case settlements  to
 fund its  current  obligations  including  operating  expenses  and  capital
 expenditures.   The   following  table  details  net  patient  billings  and
 collections by quarter for fiscal 2004 and 2005 for all patient billings:

                                                                   % of
                                                                Collections
                                                                 to Second
     Quarter         Net Patient                                 Previous
     Ending           Billings     Collections    Difference      Quarter
 -----------------  ------------  ------------   ------------   ----------
 December 2003      $  1,169,000  $    972,000   $    197,000
 March 2004            1,219,000     1,123,000         96,000
 June 2004             1,331,000     1,260,000         71,000      108%
 September 2004        1,543,000     1,255,000        288,000      103%
 December 2004         1,426,000     1,143,000        283,000       86%
 March 2005            1,612,000     1,222,000        390,000       79%
 June 2005             1,668,000     1,327,000        341,000       93%
 September 2005        1,792,000     1,368,000        424,000       85%


      Total collections for fiscal year ended September 2005 were  $5,060,000
 compared to  $4,610,000 for  2004, which  is a  10% increase.   Net  patient
 billings for 2005 were $6,498,000 compared to $5,262,000 for 2004, which  is
 a  23% increase.  The primary  reason for the  lower percentage increase  in
 collections compared to net patient billings is the longer collection  cycle
 for personal injury cases.  As a result, when quarterly net patient billings
 are increasing compared  to the  previous quarters, there  is a  lag in  the
 increase  in  collections.  Based  on  analysis of  historical  collections,
 Management  estimates  that  collections  in  a  particular  quarter  should
 approximate 85% to 90%  of the net patient  billings in the second  previous
 quarter.  For example, collections in the March 2005 quarter were 79% of net
 patient billings in the  September 2004 quarter.   If this trend  continues,
 collections in the December 2005 quarter  and the March 2006 quarter  should
 be $1,400,000 and $1,500,000, respectively.

      On December 29, 2005, the Company executed a series of agreements  with
 a private investor under which the Company will issue a $30,000  convertible
 debenture and related warrants for the investor to purchase up to $3,270,000
 of common stock.  See Financial Statement Footnote 12.  On January 10, 2006,
 the  Company  received  initial  funding  of  $250,000.  The Company intends
 to  file  an  SB-2  Registration  Statement before  January 31, 2006.   When
 the   Registration  Statement  becomes  effective,  additional  funding   of
 approximately $350,000 will be available to the Company.

      As of December 31, 2005,  the Company owed  the  IRS  for 2004  payroll
 trust fund taxes in the amount of $407,000  and 2005 taxes in the amount  of
 $115,000.  On January 12, 2005  $180,000 of the initial funding was  applied
 to the outstanding taxes.  The remainder will  be  paid from the funding  at
 the effective date  of  SB-2 Registration Statement and from operating  cash
 flow in 2006.  The Company must still negotiate the amount of penalties  and
 interest due the IRS in connection with the unpaid taxes.  Although an exact
 amount  can  not  be  determined  at  this  time,  Management  has  reserved
 approximately $160,000 as of September 30, 2005.

      In connection with the clinic acquisition  in August 2000, the  Company
 issued a note payable, which had an original due date of September 1,  2003,
 which has been extended to December 31, 2005.  The amount due as of December
 31,  2005  including  accrued  interest  was  $1,177,000.  The  Company  has
 obtained an extension until June 30, 2006.  Interest will continue to accrue
 at $5,600 per month.


 Critical Accounting Estimate

    The sole  critical accounting estimate for  the Company is the  allowance
 for discounts on patient  billings.  The estimate  has a material impact  on
 the Balance Sheet and  the Statement of  Operations.  More  than 99% of  the
 billings are for patients with multiple visits to an individual clinic.   In
 the case of patients treated under major medical insurance reimbursement and
 worker  compensation  insurance  coverage,  the  payment  for  services   is
 calculated and  reimbursed on  a per  visit  basis.   These two  sources  of
 patient billing  and  reimbursement  comprise  approximately  20%  of  total
 revenue.  The  remaining 80% is  derived from patient  billings on  personal
 injury cases.  The reimbursement for  personal injury cases is based on  the
 cumulative billings over  the treatment period,  which usually extends  over
 four to  six weeks.   The  average billing  for a  personal injury  case  is
 between $3000 and $4,000.

    The critical accounting  estimate for the Statement of Operations is  the
 allowance for discounts on patient billings.   The amount of this  allowance
 is deducted from gross patient billings  to arrive at net patient  billings,
 which is the expected reimbursement for  patient services over the  reported
 period  of  operations.  The critical  accounting estimate  for the  Balance
 Sheet is the allowance  for discount on  patient billings and  uncollectible
 patient billings.  The  amount  of  the  allowance  is deducted  from  gross
 patient billing receivables to arrive at net patient billings receivable  at
 the balance sheet date.  The value  of  the net accounts receivable  exceeds
 70% of the assets of the Company.

    Allowance  for  discounts  on  major  medical  and  worker   compensation
 insurance billings

    Approximately 95%  of the billings are for  patients treated at the  Katy
 and Bandera clinics.  The accounting estimate for discount on major  medical
 and worker compensation insurance billings is calculated based on historical
 discount allowances taken by the  responsible insurance carriers. In  fiscal
 2005, this billing category included approximately $750,000 in billings  for
 patients treated on spinal decompression systems located at the Katy  clinic
 for twelve months and  the Bandera clinic  for one month.  The  Company  has
 estimated the allowance for discount at 55% for spinal decompression  system
 treatments and 53% for other major  medical patient billings.  Although  the
 Company has no  knowledge at the  present time, if  the discount for  spinal
 decompression billings increases by more than 5% in fiscal 2006, the clinics
 will request cash payment or a  higher reimbursement from the patient.   The
 weighted-average allowance for discounts on the balance sheet and  statement
 of operations is approximately  55%.  Due to  the shorter collection  period
 for reimbursement of billings, these two categories are less than 10% of the
 accounts receivable at September 30, 2005.

    Allowance for discounts on personal injury case billings

    Approximately 80% of the revenue is generated by personal injury  patient
 billings.  The two primary factors used in calculating the estimate for  the
 allowance for discounts are the percentage of cases for patients treated  by
 the clinics which  reach the  settlement stage  and the  amount of  discount
 expressed as a percentage of the settlement.

    Approximately  95%  of  personal  injury  patients  are  represented   by
 attorneys.  After a patient has seen the  doctor at the initial visit and  a
 treatment plan  has been  discussed, the  patient is  provided with  contact
 information of attorneys available to represent the patient.  If the patient
 enters into a representation agreement with an attorney, the attorney issues
 a letter of protection (LOP) to the  clinic.  The LOP guarantees payment  to
 the clinic for medical services when the case is settled with the  insurance
 company for the  responsible party.   The  attorney is  required to  confirm
 coverage for medical treatment  of the patient within  10 business days  and
 verify the amount of  property damage.  In  addition, the attorney will  pay
 the clinic an advance  on the future settlement,  which ranges from $300  to
 $500.   As a  result of  these procedures,  the amount  of patient  billings
 written-off as a percentage of revenue has declined over the last two years.
  The following table  outlines the  actual percentage  of cases  written-off
 during the first 60 days of treatment for 2004 and 2005 and an estimate  for
 2006 expressed as a percentage of total patient billings:

      Clinic Type       Fiscal 2004          Fiscal 2005        Fiscal 2006
                           Actual               Actual            Estimate
      -------------     -----------          -----------        -----------
      Company-owned           5%                  4%                 4%

      Affiliated        Not applicable     Not applicable     Not applicable


 The most  important factor  in calculating  the allowance  for discounts  on
 personal injury cases  is the  discount percentage  on settled  cases.   The
 primary focus for Management is  the continued improvement, i.e.  reduction,
 in the discount allowed on settled cases.  The following table outlines  the
 actual results for 2004 and 2005 plus an estimate for 2006:

      Clinic Type       Fiscal 2004          Fiscal 2005        Fiscal 2006
                           Actual               Actual            Estimate
      -------------     -----------          -----------        -----------

      Company-owned          47%                 42%                32%

      Affiliated             22%                 31%                28%

      Weighted average       45%                 40%                31%

 The improvement from  45% to  40% between  2004 and  2005 is  the result  of
 multiple factors.   One  factor  is  the  decision by  Management  to  refer
 approximately  80% of  Texas  personal  injury patients  to four  law firms.
 These firms have multiple offices that  are convenient to the  company-owned
 and affiliated clinics.  Surveys conducted by independent services  indicate
 that total  settlements for  personal injury  cases related  to  automobiles
 range from 120% to 160% of medical services.  In 2005, the Company requested
 these law  firms  to  reimburse  medical  providers  at  least  50%  of  the
 settlement amount, which equates to between 60% and 80% of medical  billings
 by the clinics or  a discount between 20%  and  40%.  Another factor is  the
 lower discount for  cases settled by  the affiliated  and  medical  clinics.
 Lastly, the clinics are monitoring the  total billings for individual  cases
 taking into  consideration  factors  considered by  the  insurance  carriers
 including the amount of property damage.

 Management anticipates a further reduction in the discount in 2006 from  40%
 to 31%.  All  three factors discussed above  should improve, in  particular,
 the collections as a percentage of  the total settlement should increase  to
 60% resulting in a corresponding decrease in the discount allowed on settled
 cases.

 Based on a review and assessment of the above discussed factors,  Management
 believes that the allowance for discount on the Statement of Operations  for
 the year ended September 30, 2005  is materially accurate and the  resulting
 net  revenue  represents  the  collectible  amount  in  future  periods  and
 correspondingly, the  allowance for  discount on  the  Balance Sheet  as  of
 September 30, 2005 is materially accurate.


 Forward-Looking Information

      This report contains certain forward-looking statements and information
 relating to  the Company  that are  based on  the beliefs  of the  Company's
 management  as  well  as  assumptions  made  by  and  information  currently
 available to the Company's management. When  used in the report, words  such
 as "anticipate," "believe,"  "estimate," "expect,"  "intend," "should,"  and
 similar expressions,  as  they relate  to  the Company  or  its  management,
 identify forward-looking statements.   Such statements  reflect the  current
 views of  the Company  with respect  to  future events  and are  subject  to
 certain risks, uncertainties,  and assumptions relating  to the  operations,
 results of  operations,  liquidity,  and growth  strategy  of  the  Company,
 including competitive factors  and pricing pressures,  changes in legal  and
 regulatory requirements, interest  rate fluctuations,  and general  economic
 conditions, as well as other factors  described in this report.  Should  one
 or more of  the risks materialize,  or should  underlying assumptions  prove
 incorrect, actual  results  or  outcomes  may  vary  materially  from  those
 described herein as anticipated, believed, estimated, expected, or intended.


 ITEM 7. FINANCIAL STATEMENTS

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES


                                    INDEX


                                                                  Page
                                                                  ----
 FINANCIAL STATEMENTS:

 Report of Independent Registered Public Accounting Firm           15

 Consolidated Balance Sheet - September 30, 2005                   16

 Consolidated Statements of Operations - Years Ended               17
      September 30, 2004 and 2005

 Consolidated Statements of Changes in Stockholders' Equity        18
      - Years  Ended September 30, 2004 and 2005

 Consolidated Statements of Cash Flows - Years Ended               19
      September 30, 2004 and 2005

 Notes to Consolidated Financial Statements                        20

<PAGE>

           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


 To the Board of Directors and Stockholders
 American HealthChoice, Inc. and Subsidiaries


 We have  audited the  accompanying consolidated  balance sheet  of  American
 HealthChoice, Inc.  and  Subsidiaries as  of  September 30,  2005,  and  the
 related consolidated  statements  of operations,  changes  in  stockholders'
 equity, and  cash flows  for each  of  the two  years  in the  period  ended
 September 30, 2005.   These financial statements  are the responsibility  of
 the Company's management.   Our responsibility is to  express an opinion  on
 these financial statements based on our audits.

 We conducted  our audits  in accordance  with the  standards of  the  Public
 Company Accounting Oversight Board (United States).  Those standards require
 that we plan  and  perform  the audit to obtain  reasonable assurance  about
 whether the  financial statements  are  free  of material  misstatement.  An
 audit includes examining, on a test  basis, evidence supporting the  amounts
 and  disclosures  in  the  financial  statements.  An  audit  also  includes
 assessing  the  accounting principles used  and  significant estimates  made
 by  management,  as  well  as  evaluating the  overall  financial  statement
 presentation.  We believe that our audits provide a reasonable basis for our
 opinion.

 In our  opinion, the  consolidated financial  statements referred  to  above
 present fairly, in all material respects, the financial position of American
 HealthChoice, Inc.  and  Subsidiaries as  of  September 30,  2005,  and  the
 results of their operations and their cash  flows for each of the two  years
 in the  period  ended  September 30,  2005  in  conformity  with  accounting
 principles generally accepted in the United States of America.



 Lane Gorman Trubitt, L.L.P.
 Dallas, Texas
 December 2, 2005 except for Note 12
 for which the date is January 11, 2006

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                         CONSOLIDATED BALANCE SHEET
                              SEPTEMBER 30, 2005


                                    ASSETS
 Current Assets:

 Cash                                                     $        8,599
 Accounts receivable, less allowance for doubtful
   accounts of $ 3,882,923                                     5,891,902
 Notes receivable                                                208,833
 Other current assets                                             40,426
                                                           -------------
      Total current assets                                     6,149,760

 Property and equipment, net                                     468,835
 Goodwill, net                                                 1,348,570
                                                           -------------
      Total assets                                        $    7,967,165
                                                           =============


                  LIABILITIES AND STOCKHOLDERS' EQUITY

 Current Liabilities:

 Notes payable and capital lease obligations              $      248,074
 Acquisition note payable including accrued interest           1,165,497
 Bankruptcy claims of unsecured creditors                        210,000
 Obligations to related parties                                1,418,700
 Accrued payroll taxes and penalties                             638,470
 Accrued affiliated clinic management fees                       267,286
 Accounts payable and accrued expenses                           468,545
                                                           -------------
      Total current liabilities                                4,416,572


 Commitments and Contingent Liabilities

 Stockholders' Equity:

 Preferred stock, $.001 par value; 5,000,000
   shares authorized; 13,875 shares issued                     1,387,500
 Common stock, $.001 par value; 200,000,000 shares
   authorized; 110,970,759 shares issued and outstanding         110,971
 Additional paid-in capital                                   20,751,088
 Accumulated deficit                                         (18,698,966)
                                                           -------------
      Total stockholders' equity                               3,550,593
                                                           -------------
      Total liabilities and stockholders' equity          $    7,967,165
                                                           =============


      See accompanying notes to these consolidated financial statements.

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF OPERATIONS


                                                   Years Ended September 30,
                                                   -------------------------
                                                      2004           2005
                                                   ----------     ----------
 Revenues:
   Patient billings                               $ 9,740,645    $11,095,449
   Allowance for discount on billings               4,478,107      4,597,473
                                                   ----------     ----------
   Net patient billings                             5,262,538      6,497,976
   Equipment rental and sales                               -         80,849
                                                   ----------     ----------
       Net revenues                                 5,262,538      6,578,825

 Operating Expenses:
   Compensation and benefits                        2,732,205      2,893,889
   Marketing and advertising                        1,151,457      1,269,732
   General and administrative                       1,066,781      1,290,097
   Affiliated clinic management fees                  179,000        362,000
                                                   ----------     ----------
       Total operating expenses                     5,129,443      5,815,718

                                                   ----------     ----------
 Operating Income                                     133,095        763,107

 Other Income (Expense):
   Interest expense and other costs of borrowing      (77,309)      (150,560)
   Bad debt expense                                (1,525,000)             -
   Other expense                                      (28,339)      (158,167)
   Other income                                             -        155,304
                                                   ----------     ----------
       Total other expenses                        (1,630,648)      (153,423)

                                                   ----------     ----------
 Net Income (Loss)                                 (1,497,553)       609,684

 Preferred stock dividend                                   -        (63,100)
                                                   ----------     ----------
 Net Income (Loss) Applicable to Common           $(1,497,553)   $   546,584
                                                   ==========     ==========
 Basic and diluted net earnings (loss) per share:
   Net Income (Loss)                              $     (0.01)   $      0.01
   Preferred stock dividend                                 -              -
                                                   ----------     ----------
   Basic and diluted net earnings (loss) per share
     applicable to common stockholders            $     (0.01)   $      0.01
                                                   ==========     ==========
 Weighted Average Common Shares Outstanding       104,812,000    108,205,000
                                                  ===========    ===========


      See accompanying notes to these consolidated financial statements.

<PAGE>
<TABLE>

                                        AMERICAN HEALTHCHOICE, INC.
                                             AND SUBSIDIARIES

                         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                  YEARS ENDED SEPTEMBER 30, 2004 AND 2005

                                                                               Option to    Additional
                                         Common Stock       Preferred Stock     Acquire      Paid-in     Accumulated
                                      Shares      Amount   Shares     Amount    Common       Capital       Deficit        Total
                                                                                 Stock
                                    ----------    -------  ------    --------   --------    ----------   -----------    ----------
 <S>                               <C>           <C>      <C>       <C>        <C>         <C>          <C>            <C>
 Balances at September 30, 2003    103,100,766 $  103,100       -   $       -  $   8,000   $20,669,684  $(17,747,997)  $ 3,032,787

 Issuance of common stock in
   connection with debenture
   conversion                        7,258,493      7,259       -           -          -     1,303,141             -     1,310,400
 Cancellation of common stock
   in connection with purchase
   adjustment                      (13,164,000)   (13,164)      -           -          -        13,164             -             -
 Issuance of common stock in
   connection with consulting
   and legal agreements              7,000,000      7,000       -           -          -        72,000             -        79,000
 Issuance of Series B Preferred
   Stock                                     -          -  20,000   2,000,000          -    (2,000,000)            -             -
 Cancellation of common stock in
   connection with clinic sale      (3,600,000)    (3,600)      -           -          -       (90,000)            -       (93,600)
 Net loss                                    -          -       -           -          -             -    (1,497,553)   (1,497,553)
                                   -----------------------------------------------------------------------------------------------
 Balances at September 30, 2004    100,595,259    100,595  20,000   2,000,000      8,000    19,967,989   (19,245,550)    2,831,034

 Issuance of common stock in
   connection with employment
   agreement                         1,250,000      1,250       -           -          -        23,750             -        25,000
 Issuance of common stock in
   connection with exercise
   of stock options                  1,327,500      1,328       -           -     (8,000)       91,547             -        84,875
 Conversion of Series B Preferred
   Stock into common stock           7,152,000      7,152  (6,125)   (612,500)         -       605,348             -             -
 Issuance of common stock in
   connection with preferred
   stock dividends                     646,000        646       -           -          -        62,454       (63,100)            -
 Net income                                  -          -       -           -          -             -       609,684       609,684
                                   -----------------------------------------------------------------------------------------------
 Balances at September 30, 2005    110,970,759  $ 110,971  13,875  $1,387,500  $       -   $20,751,088  $(18,698,966)  $ 3,550,593
                                   ===============================================================================================


                                  See accompanying notes to these consolidated financial statements.

</TABLE>
<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                    CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                    Years Ended September 30,
                                                    --------------------------
                                                       2004            2005
                                                    ----------      ----------
 Cash Flows From Operating Activities:
 Net income (loss)                                $ (1,497,553)    $   609,684
 Adjustments to reconcile net income (loss)
     to net cash provided by (used in)
     operating activities:
   Employee and director compensation-stock                  -          53,000
   Other                                                62,362         (24,436)
   Bad debt loss                                     1,525,000               -
   Cancellation of bankruptcy obligations                    -        (155,000)
   Depreciation and amortization                        60,779          72,191
 Change in operating assets and liabilities, net:
   Accounts receivable-trade                          (707,097)     (1,210,365)
   Accounts payable and accrued expenses               602,684         435,545
                                                    ----------      ----------
       Net cash provided by (used in)
         operating activities                           46,175        (219,381)

 Cash Flows From Investing Activities:
   Payments on notes receivable                              -          27,500
   Property and equipment                               (4,667)        (43,197)
                                                    ----------      ----------
       Net cash used in investing activities            (4,667)        (15,697)

 Cash Flows From Financing Activities:
   Proceeds from notes payable                         123,500         325,500
   Payments on notes payable and capital leases       (176,508)        (91,394)
                                                    ----------      ----------
       Net cash provided by (used in)
         financing activities                          (53,008)        234,106
                                                    ----------      ----------
 Net Decrease In Cash                                  (11,500)         (3,687)
 Cash At Beginning Of Year                              21,071           9,571
                                                    ----------      ----------
 Cash At End Of Year                               $     9,571     $     8,599
                                                    ==========      ==========
 Supplemental Disclosure Of Cash Flow Information:
   Income taxes paid                               $     1,500     $         -
   Interest paid                                         5,000          70,000

 Supplemental Disclosure of Non-Cash Transactions:
   Issuance of common stock in connection with
     executive employment contract                           -          25,000
   Issuance of stock in connection with legal
     and consulting agreements                          79,000               -
   Conversion of debenture into stock                1,310,400               -
   Purchase of equipment through issuance of
     capital leases                                    120,000         122,000
   Cancellation of debt and stock in connection
     with sale of clinic                               212,200               -
   Sale of clinic assets                               308,200               -
   Issuance of note receivable in connection
     with sale of clinic                                96,000               -
   Issuance of common stock in connection
     with exercise of stock options                          -          56,875
   Conversion of preferred stock into common stock           -         612,500
   Preferred stock dividend                                  -          63,100


      See accompanying notes to these consolidated financial statements.

<PAGE>

                         AMERICAN HEALTHCHOICE, INC.
                               AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


 1. Organization and Summary of Significant Accounting Policies

 Organization - American HealthChoice, Inc. and Subsidiaries (the Company) is
 a medical sales and service company  which consists of a parent company  and
 three  business  divisions:  Medical  Clinics, RehabCo  and  TelmedCo.   The
 company operates 13 company-owned medical clinics in Texas.  The Company has
 approximately 30 clinics in its Affiliated Clinic Program located in  Texas,
 Tennessee and  Kansas.   Substantially all  of  the Company's  revenues  are
 derived from chiropractic, physical therapy and medical services provided to
 individuals living in the vicinity of  the clinics.  TelmedCo was formed  to
 embrace the revolutionary technology of  Telemedicine and to provide  second
 opinions to patients of  the Medical Clinics  Division.  Currently  TelmedCo
 provides second opinions to company-owned and affiliated clinics as well  as
 four clinics  outside the  Division's network.   As  of September  30,  2005
 TelmedCo had 8 Production systems in  place.  RehabCo, Inc., a  wholly-owned
 subsidiary of the Company,  sells and recognizes  commission revenue on  the
 sale of spinal decompression systems.

 Consolidation Policy -  The accompanying  consolidated financial  statements
 include the accounts of the Company and its wholly-owned subsidiaries.   All
 material inter-company  accounts and  transactions have  been eliminated  in
 consolidation.

 Net  Patient  Billings - Revenue is recognized upon performance of services.
 Substantially all  of  the  Company's  revenues  are  derived  from  medical
 services provided to  patients treated  at the  Company's company-owned  and
 affiliated clinics.  The  allowance for discount on  patient billings is  an
 accounting estimate of  the anticipated discounts  on patient billings  upon
 settlement and  anticipated  write-off  of patient  billings  for  which  no
 settlement  is received  by the treating  clinic.  Allowances are maintained
 at  levels  considered  appropriate  by  Management  based  upon  historical
 experience and other factors deemed pertinent.  Net patient billings are the
 anticipated reimbursement for medical services provided during the  reported
 period of operations.

 Cash Equivalents  - For  purposes of  the  consolidated statements  of  cash
 flows, the Company  considers all highly  liquid debt instruments  purchased
 with a maturity of three months or less to be cash equivalents.  The Company
 maintains its accounts at financial institutions located in Texas.  The bank
 accounts are  insured by  the Federal  Deposit Insurance  Corporation up  to
 $100,000.   The Company  has not  experienced  any losses,  outside  banking
 activities, in such accounts and believes  it is not exposed to  significant
 credit risk.

 Capital Leases  -  The  assets and  related  obligations  for  property  and
 equipment under capital leases are initially recorded at an amount equal  to
 the present value of  future minimum lease payments.   Assets under  capital
 leases are  amortized over  the life  of the  lease or  useful life  of  the
 assets.   Interest  expense is  accrued  on  the basis  of  the  outstanding
 obligations under capital leases.

 Marketing and Advertising  Costs - The  Company's policy is  to expense  all
 costs in  the period  in which  the marketing  and advertising  first  takes
 place.  Marketing and Advertising  expense was approximately $1,270,000  and
 $1,151,000 for the years ended September 30, 2005 and 2004 respectively.

 Property and Equipment, net - Property and equipment are stated at cost less
 accumulated depreciation.   Depreciation  is  provided  over  the  estimated
 useful lives of the related assets, primarily using straight-line methods.

 Income Taxes -  The Company  accounts for  income taxes  under Statement  of
 Financial Accounting  Standards (SFAS)  Statement No.  109, "Accounting  for
 Income Taxes." SFAS Statement No. 109 requires that deferred income taxes be
 recorded on  a  liability  method  for  temporary  differences  between  the
 financial reporting and tax bases of a company's assets and liabilities,  as
 adjusted when new tax rates are enacted.

 Goodwill - The  Company adopted the  provisions of SFAS  Statement No.  142,
 "Goodwill and Other Intangible Assets" as  of October 1, 2001.  This  policy
 requires an impairment test, which is performed by the Company on an  annual
 basis.  See footnote 3 to the consolidated financial statements.

 Recent Accounting Pronouncements  -  During the fiscal year ended  September
 30,  2005,  the  Financial  Accounting  Standards  Board  ("FASB")  released
 SFAS Statement No. 154.  The Company believes  that the impact of  these new
 standards  will  not  have a material effect  on the Company's  consolidated
 financial position, results of operations or disclosures.

 Use of Estimates  -  In  preparing  the Company's  financial  statements  in
 conformity with  accounting  principles  generally accepted  in  the  United
 States of America, management is required to make estimates and  assumptions
 that  affect  the  amounts  reported  in  these  financial  statements   and
 accompanying notes.  Actual results could differ from those estimates.

 Earnings per Share  -  Basic  earnings  per  share are  computed  using  the
 weighted-average number of common shares outstanding.  Diluted earnings  per
 share are  computed using  the  weighted-average common  shares  outstanding
 after giving effect to  potential common stock from  stock options based  on
 the  treasury  stock  method.   If the  result  of  assumed  conversions  is
 dilutive, the average shares of common stock outstanding are increased.  The
 effect  of  potentially  dilutive  securities  at  September  30,  2005  was
 immaterial and at September 30, 2004 was anti-dilutive.

 Reclassification of Certain Expenses- Certain  expenses on the statement  of
 operations for the year ended September 30, 2004 have been reclassified with
 no effect on net loss (or loss per  common share) to be consistent with  the
 classifications adopted for the year ended September 30, 2005.


 2. Property and Equipment

 Property and equipment consists of the following:

                                                 Useful Life    9/30/2005
                                                 -----------    ----------
    Land                                                   -   $   120,000
    Building and leasehold improvements           2-39 years        66,319
    Furniture and equipment, including
      equipment under capital leases              5-15 years       711,570
    Automobiles                                    5 years          93,355
    Less accumulated depreciation
      and amortization                                            (522,409)
                                                                ----------
                                                               $   468,835
                                                                ==========
 The following is a summary of equipment under capital leases:

      Equipment                                                $  190,080
      Less accumulated amortization                               (16,216)
                                                                ---------
                                                               $  173,864
                                                                =========

 All assets leased are pledged as collateral under the existing capital lease
 agreements.


 3. Goodwill

 The Company adopted SFAS Statement No.  142, "Goodwill and Other  Intangible
 Assets" as of October  1, 2001.  This  pronouncement addresses the issue  of
 proper accounting and  reporting for  intangible assets,  such as  purchased
 goodwill.   SFAS  142  modified  the  purchase  method  of   accounting   by
 eliminating the  amortization of  goodwill  and substituting  an  impairment
 test.  In  this regard,  the Company engaged  an independent valuation  firm
 to  conduct the  impairment  test  as  of  September 30, 2004.  Due  to  the
 significant increase  in  operating  income  for  the  twelve  months  ended
 September 30,  2005,  Management  elected to  conduct  the  impairment  test
 internally as of September  30, 2005.  For  testing purposes the  "reporting
 unit", as  prescribed  by  SFAS  142, was  the  three  clinics  acquired  in
 September 2000 for a total purchase price of $5,247,500.

 The first  step  of  the goodwill  impairment  testing  process  involves  a
 "carrying amount comparison" that compares the  fair value of the  reporting
 unit to its carrying value.  If  fair value exceeds carrying value, then  no
 further testing is required.   For fiscal 2004  and  fiscal 2005, the income
 approach was relied  on with  the discounted  cash flow  method utilized  to
 compute the fair  value.   With respect to  the valuation  of the  reporting
 unit, the firm relied on the results of the income approach.  In  connection
 with this approach, the  firm utilized the discounted  cash flow method  for
 both years.

 For  the  twelve  month  period  ended  September 30,  2004 operating income
 for the reporting units was  $377,000,  prior  to  inclusion  of a corporate
 expense allocation.  Using  the  income approach and calculation assumptions
 consistent with the  prior year, including  a corporate expense  allocation,
 the fair value of the net assets of  the reporting unit was estimated to  be
 approximately $3,600,000  as of September 30,  2004, in the  opinion of  the
 independent valuation firm.  This fair  value  approximated  the  $3,555,000
 carrying  value  of the  reporting  unit.  Therefore,  the Company  has  not
 recorded an impairment loss.

 For  the  twelve  month  period  ended  September 30,  2005 operating income
 for  the reporting  units  was  $842,000,  prior to inclusion of a corporate
 expense allocation.  Using  the income approach and calculation  assumptions
 consistent with the  prior year, including  a corporate expense  allocation,
 the fair value of the net assets of  the reporting unit was estimated to  be
 approximately $5,600,000 as of September 30, 2005.  This fair value exceeded
 the $3,589,000 carrying value of the reporting unit.  Therefore, the Company
 has not recorded an impairment loss.


 4. Notes Payable and Capital Lease Obligations

                                                                   9/30/2005
                                                                   ----------
    Acquisition note payable including accrued interest           $ 1,165,497

    Notes payable secured by automobiles                               48,924

    Capital lease obligations secured by clinic equipment             185,178

    Other notes payable                                                13,972
                                                                   ----------
                                                                  $ 1,413,571
                                                                   ==========

 The acquisition note payable is to an investment group (See Footnote 5),  in
 which certain officers and directors, and a beneficial owner of more than 5%
 of the common  stock have a  financial interest.   The principal balance  is
 $837,500 and bears interest  at 8% per  annum with an  original due date  of
 September 1, 2003.  The Company  has obtained an additional extension  until
 June 30, 2006.   Interest will  accrue  at approximately  $5,600  per month.
 Interest expense on this note payable was approximately $67,000 for each  of
 the years ended September 30, 2005 and 2004.

 Principal payments  for the  notes payable  secured  by automobiles  are  as
 follows: $22,500 in 2006, $18,000 in 2007 and $8,400 in 2008.  Minimum lease
 payments, including  $45,500  of interest  expense,  for the  capital  lease
 obligations secured by  clinic equipment are  as follows:  $72,600 in  2006,
 $63,500 in 2007,  $57,200 in  2008, and $37,400  in 2009.   Certain  capital
 lease obligations are guaranteed by an officer of the Company.


 5. Related Party Transactions

 Belair Capital Group, Ltd. ("Belair"),  a Nevada limited liability  company,
 is the holder  of an  $837,500 note payable  issued in  connection with  the
 acquisition of three clinics  in September 2000.   In addition, the  Company
 issued 8,375,000 shares of common stock to Belair as further  consideration.
 The note payable  of $837,500 and  the 8,375,000 shares of common stock  are
 the sole assets of Belair.   The following shareholders are also members  of
 Belair: the president and CEO (51% member interest), a principal shareholder
 and board member  (19% member interest),  and the seller  of the clinics,  a
 beneficial owner of more than 5%  of the outstanding stock at September  30,
 2005 (30% member interest).

 On September 30,  2004, The Company  sold its Uptown  clinic located in  New
 Orleans to the clinic's director, who is a member of the Company's Board  of
 Directors.   The sales  price was  $310,000,  of which  $96,000 was  a  note
 payable from the director with 24  equal monthly installments in the  amount
 of $4,000, $122,000 paid through the extinguishment of certain notes payable
 and other  obligations of  the  Company to  the  director and  $92,000  paid
 through the return  and cancellation of  3,600,000 shares  of the  Company's
 common stock owned by the director with a share price of $0.025.  The  sales
 price approximated the net asset value at September 20, 2004.

 On September 30, 2004  the Company issued $2,000,000  of Series B  Preferred
 Stock in connection  with the  clinic acquisition  in September  2000.   The
 following shareholders are beneficial owners of  Series  B  Preferred Stock:
 the president and CEO ($875,000), a  principal shareholder and board  member
 ($250,000), and the seller of the  clinics, a beneficial owner of more  than
 5% of the outstanding stock at September 30, 2004 ($875,000).

 From January 2003 to December 2005, the corporate office of the Company  has
 been located in a building leased from  the President and CEO.  The  monthly
 rent was $2,200 per month.  On  January 1, 2006, the Company moved to a  new
 building.  The Company also leases property on a month-to-month basis from a
 related party.  Rent expense to related parties totaled $41,950.

 The following schedule lists obligations to related parties as of  September
 30, 2005:

      Obligation                    President &      Other          Total
                                        CEO         Insiders
      ---------------------------    ----------     ---------     -----------
      (1) Bankruptcy bridge loans   $    72,600     $ 127,500     $   200,100
      (2) Deferred wages                671,700         4,600         676,300
      (3) Stock loans                   197,500       225,500         423,000
      (4) Other                         113,000         6,300         119,300
                                     ----------      --------      ----------
          Total                     $ 1,054,800     $ 363,900     $ 1,418,700
                                     ==========      ========      ==========

      (1) Loans to Company between February 1999 and August 1999.  An
          equivalent value of common stock was issued at that time.

      (2) $85,000 in 1999 wages due from bankruptcy claim, $502,000
          deferred wages from February 2002 to July 2004 and $84,700
          deferred wages for 2005.

      (3) Includes $132,000 proceeds from sale of stock and equivalent
          loan to Company by President & CEO in 1997 and $65,500 loan from
          sale of stock in 2005.  Also includes $225,500 loan to Company
          from an owner of more than 5% of outstanding stock form proceeds
          of sale of common stock.

      (4) Includes $72,600 accrued rent for corporate office.


 6. Lease Commitments

 Rent expense for  the years ended  September 30, 2004  and 2005 amounted  to
 approximately $323,000  and $309,000,  respectively.   Future minimum  lease
 payments under operating  leases with  terms in excess  of one  year are  as
 follows:

                       Years ending September 30,
                       --------------------------
                       2006                           $ 153,000
                       2007                             103,000
                       2008                              28,000
                                                       --------
                       Total minimum lease payments   $ 284,000
                                                       ========

 7. Stockholders' Equity

 On April 18,  2004, the Company  filed a Form  S-8 with  the Securities  and
 Exchange Commission to issue 4,500,000  shares of unrestricted common  stock
 pursuant to a consulting agreement with  an attorney.  Under the  agreement,
 the attorney  is  obligated to  provide  approximately 140  hours  of  legal
 services for the Company.   The fair  market value of  the stock issued  was
 $54,000.   At September  30,  2005, the  attorney  is obligated  to  provide
 approximately 100 hours of legal services.

 On April 28, 2004, the Company issued 2,500,000 shares of restricted  common
 to an investor  relation firm  to provide  consulting services  for the  six
 month period ending  October 31, 2004.  The fair market  value of the  stock
 issued was $25,000.

 On September 30, 2004  the Company issued $2,000,000  of Series B  Preferred
 Stock in connection  with the  clinic acquisition  in September  2000.   The
 Series B Preferred Stock  has the following terms:  (i) face value of  $100,
 (ii) 4%annual dividend,  (iii) convertible into  common stock  at $0.05  per
 share or higher, (iv) automatic call conversion if stock price exceeds $0.20
 per share, (v) redeemable for cash up to $250,000 per year for two years  if
 net income exceeds $500,000 and (vi)  automatic put conversion on  September
 30, 2007 at $0.05 per share.

 During fiscal year  2005, the president  and CEO converted  4,375 shares  of
 Series B  Preferred  Stock  into  5,469,000 shares  of  common  stock  at  a
 conversion price of $0.07 per share and an owner of more 5% of common  stock
 converted 1,750 shares of Series B Preferred Stock into 1,683,000 shares  of
 common stock at a conversion price of $0.10 per share.

 In March 2005  and September 2005,  the Company issued  302,000 and  344,000
 shares, respectively, as dividend payments on the Series B Preferred Stock.


 8.  Accounts Receivable

<TABLE>

 Following is an aging analysis as of September 30, 2005 for the patient
 billing of the Medical Clinic Division:

 Clinic Type        Total      %     Less than   %     6 months    %     1 year to    %      Over       %
                                     6 months          to 1 year          2 years           2 years
 -------------    ----------  ---   ----------  ---   ----------  ---   ----------  ---   ----------  ---
 <S>             <C>          <C>  <C>           <C> <C>           <C> <C>           <C> <C>           <C>
 Company-owned   $ 8,428,000  100  $ 2,964,000   35  $ 1,822,000   22  $ 1,512,000   18  $ 2,130,000   25

 Affiliated          711,000  100      476,000   67      200,000   28       35,000    5            -    -

 Physician           808,000  100      406,000   51      213,000   26      113,000   14       76,000    9
                  ----------        ----------        ----------        ----------        ----------
 Total           $ 9,947,000  100  $ 3,846,000   39  $ 2,235,000   22  $ 1,660,000   17  $ 2,206,000   22
                  ==========        ==========        ==========        ==========        ==========

</TABLE>

 The Medical Clinic  Division patient billings  receivables  at September 30,
 2004 and 2005  consist of  the following, stated  as a  percentage of  total
 accounts receivable:

                                                    9/30/2004    9/30/2005
                                                    ---------    ---------
    Personal injury claims                             86%          89%
    Medical claims filed with insurance companies       8            5
    Other claims                                        6            6
                                                      ---          ---
                                                      100%         100%
                                                      ===          ===


 9. Income Taxes

 The Company reported  a net  loss of $1,498,000  for the  fiscal year  ended
 September 30,  2004  and  net income  of  $610,000  before  preferred  stock
 dividends for the fiscal year ended  September 30, 2005.  After taking  into
 consideration differences  for expense  deductions for  financial  reporting
 purposes  and  for  federal  income  tax  purposes,  the  taxable  loss  was
 $1,494,000 in 2004 and the taxable income was $530,000 in 2005.

 At September 30, 2005, the Company has net operating loss carry forwards  of
 approximately $6,000,000 to offset future taxable income.  The net operating
 loss carry forwards expire in varying  amounts from 2009 through 2024.   All
 deferred tax  assets  have  a valuation  allowance  which  reduces  the  net
 deferred tax balance to zero.


 10. Stock Options

 In August 1995, the Company adopted its 1995 Employee Stock Option Plan (the
 "1995 Employee Plan") under which options to purchase shares of common stock
 may be issued  to employees  and  consultants of  the Company.  The  Company
 reserved 1,000,000 shares of  common stock for  issuance under the  Employee
 Plan.   Also in  August  1995, the  Company  adopted the  1995  Non-Employee
 Director Stock Option Plan (the "1995 Director Plan") which provides for the
 grant of options to directors of up to 250,000 shares that do not qualify as
 "incentive stock options" under the Internal Revenue Code of 1986.

 In February 2005, the Company adopted its 2005 Stock Option Plan (the "2005"
 Plan) and filed a Form  S-8 to register 5,000,000  shares  of  common stock.
 The 2005 Plan provides for the grant of incentive stock options to employees
 and the grant of non-qualified options to directors.

 The following schedule summarizes the changes in the 1995 Employee Plan, the
 1995 Director Plan and the 2005 Plan  for the two years ended  September 30,
 2005:

                                                          Option Price
                                        Number of    Per Share  Total Option
                                         Shares                    Price
                                       ---------     ---------  ------------
 Outstanding at September 30, 2003     1,017,500       $0.05     $ 50,900
 (1,017,500 exercisable)

   For the year ended
     September 30, 2004:
       Granted                           100,000        0.01        1,000
       Cancelled                          40,000        0.05        2,000
       Expired                                 -           -            -
       Exercised                               -           -            -
                                       ---------    -----------  --------
 Outstanding at September 30, 2004     1,077,500    0.05 - 0.01    49,900
   (1,077,500 exercisable)

   For the year ended
     September 30, 2005:
       Granted                         2,490,000    0.13 - 0.01   116,700
       Cancelled                          50,000         .05        2,500
       Expired                                 -           -            -
       Exercised                       1,327,500    0.05 - 0.01    56,900
                                       ---------    -----------  --------
 Outstanding at September 30, 2005     2,190,000    $0.13-$0.01  $107,200
   (2,190,000 exercisable)             =========    ===========  ========

 The fair value of all  incentive options granted for  2005 would not have  a
 material effect on net income reported for 2005.  All options granted in the
 year ended September 30, 2004 were under the 1995 Director Plan. The expense
 attributable to the grants was immaterial.

 The expense attributable to options granted and exercised by directors under
 the 1995 Director Plan and  the 2005 Plan for  the year ended  September 30,
 2005, which were accounted for as non-qualified options, was $28,000.


 11. Bankruptcy Obligations

 At September 30, 2005, the Company was delinquent on payments for  unsecured
 creditor claims according  to the Plan  of Reorganization  confirmed by  the
 Bankruptcy Court in September 2000 in the amount of $365,000.  Per the  Plan
 of Reorganization,  claims in  excess of  $5,000 were  to be  paid in  three
 annual installments due September 2001, 2002 and 2003, and claims less  than
 $5,000 were to be paid  in September 2001.   Since the Bankruptcy Court  has
 closed the case  and no longer  has jurisdiction, a  creditor would have  to
 file a civil suit in a  Texas state court to pursue its  claim.  Due to  the
 four year statute of limitation on filings civil suits in Texas, a  creditor
 must initiate a suit by September 2005 to pursue collection of the September
 2001 installment for claims in excess of $5,000 and for all claims less than
 $5,000.

 No creditor has initiated a  claim as of September  30, 2005.  Therefore  in
 September 2005 the Company cancelled the  claims of less than $5,000 in  the
 amount of $50,000 and  one-third of the  claims in excess  of $5,000  in the
 amount of $105,000.  The total of  $155,000 was reported as other  income on
 the Statement of Operations.


 12. Convertible Debenture

 On  December 29, 2005,  the  Company  entered  into  three  agreements  with
 Golden  Gate  Investors,  Inc.  ("GGI"):  (i)  4 3/4%  Convertible Debenture
 ("Debenture"), (ii)  Warrant  to  Purchase  Common  Stock  ("Warrant"),  and
 Securities Purchase Agreement.

 The Debenture  Principal  Amount is  $30,000  and  has a  maturity  date  of
 December 29, 2008.  The conversion price shall be 85% of the average of  the
 5 lowest volume weighted average prices("vwap")  during the 20 trading  days
 prior to GGI's election to convert.  If  GGI elects to convert a portion  of
 the Debenture and, on the day  that the election is  made, the vwap is  less
 than $0.075, the Company shall have the right to prepay that portion of  the
 Debenture that GGI elected to convert, plus any accrued and unpaid interest,
 at 120% of such amount.  In the event that the Company elects to prepay that
 portion of the  Debenture, GGI shall  the right to  withdraw its  conversion
 notice.

 The Company  is  obligated to  file  a Form  SB-2  with the  Securities  and
 Exchange Commission relating to the offer and sale of securities included in
 the agreements with GGI.  If the Form SB-2 is not effective  by the 90th day
 from  December 29, 2005, the  Company shall  be subject  to certain  default
 provisions.

 On January 10, the Company received the $30,000 proceeds from the  Debenture
 and a prepayment of $220,000 towards the exercise of warrant shares.


 13. Contingencies

 The Company has  received notices from  the Internal  Revenue Service  (IRS)
 asserting deficiencies in  trust fund payroll  taxes for 2003  and 2004  tax
 years, and penalties and  interest for 1999  to 2004 tax  years.  The  total
 claim is approximately $815,000 including $426,000 in taxes and $389,000  in
 penalties and interest.  The accompanying financial statements at  September
 30, 2005  reflect the  Company's estimate  of  $599,000 for  payroll  taxes,
 penalties and interest.


 ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

 None to report


                                   PART III


 ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT


      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


 The following table sets forth information regarding the executive  officers
 and directors of the Company.

        Name             Age           Position                   Since
        ----             ---           --------                   -----
 Joseph W. Stucki, D.C.   47   President, Chief Executive      March 1995
                               Officer and Chairman of the
                               Board of Directors

 John C. Stuecheli        58   Chief Financial Officer,        January 1999
                               Vice President and Secretary

 Jeffrey Jones, D.C.      44   Director                        March 1995

 Michael R. Smith, M.D.   47   Director                        December 1996

 V. John Mansfield        58   Director                        June 1998

 James Roberts            46   Director                        June 1998


      Joseph W.  Stucki,  D.C.   Dr.  Stucki  is  Chairman of  the  Board  of
 Directors, Chief Executive Officer and President of the Company.  Dr. Stucki
 has been a licensed chiropractor for  approximately 20 years.  In May  1983,
 he founded  United  Chiropractic Clinics,  Inc.  and, as  its  Chairman  and
 President,  purchased  or  developed  and  opened  approximately  84  multi-
 disciplined   clinics   (chiropractic,   medical,   physical   therapy   and
 diagnostic).  From  1988 through  1995, Dr.  Stucki served  as Chairman  and
 Chief Executive Officer of United Health  Services.  United Health  Services
 developed approximately 150  franchises throughout the  United States.   Dr.
 Stucki has been a consultant to health care organizations on various  issues
 including  practice  management,  strategic  development,  and  mergers  and
 acquisitions.   Dr.  Stucki  has authored  several  papers  and  manuals  on
 practice management and has been a guest speaker on health care issues.  Dr.
 Stucki is a member of various national, state, and local organizations.

      John C. Stuecheli  Mr. Stuecheli  became Chief Financial Officer,  Vice
 President of Finance  and Secretary  of the Company  in January  1999.   Mr.
 Stuecheli was first employed by the Company in November 1998 as  Controller.
 From  November 1996  to October 1998,  Mr. Stuecheli was  Vice President  of
 Finance  and  Chief Financial Officer for  Irata, Inc.,  a manufacturer  and
 operator of photo booths and other vending equipment.

      Jeffrey Jones, D.C.  Dr. Jones is a Director of the Company.  He is the
 Clinic Director  of  the United  Chiropractic  Uptown Clinic,  New  Orleans,
 Louisiana.  He obtained his Louisiana Doctor of Chiropractic license in July
 1985, and began his association with  the United Chiropractic Uptown  clinic
 shortly thereafter.  In the past, Dr. Jones has acted as Regional Manager of
 other United Clinics in the greater New Orleans area.  He is a member of the
 Chiropractic Association of Louisiana, The Union of Chiropractic  Physicians
 and the American Chiropractic  Association.  Dr.  Jones acquired the  Uptown
 Clinic from the Company on September 30, 2004.

      Michael R. Smith, M.D.  Dr. Smith  became a Director of the Company  in
 December 1996.  Dr. Smith, a practicing physician board certified in  family
 practice, was employed by the Company  from September 1994 to December  2000
 and rejoined the Company in September 2003.  He provides medical services at
 two of the  Company's clinics  and serves as  the Medical  Director for  the
 Company's Texas clinics.  He  also serves on the  Board of Directors of  AHC
 Physicians Corporation, Inc., a subsidiary of  the Company.  From June  1992
 through August 1994, Dr. Smith was an employee and then partner at the Texas
 Trauma Rehabilitation Association.  Dr. Smith graduated from The  University
 of Texas Medical Branch in 1984.

      V. John Mansfield.  Mr. Mansfield  became a Director of the Company  in
 June 1998.  He has  been the President and  Chief Executive Officer of  Axis
 Capital LLC since  May 1997.   Axis Capital LLC,  a privately owned  company
 located in Atlanta,  Georgia, provides  advisory services  for companies  in
 transition, including  start-ups, turnarounds,  new growth  initiatives  and
 mergers and acquisitions.   Since December  2003, Mr. Mansfield  has been  a
 director and  the  audit  committee  chairman  of  Technoconcepts,  Inc.,  a
 wireless technology development company based in Sherman Oaks, California.

      James Roberts.  Mr.  Roberts became a Director  of the Company in  June
 1998.  He  has been  the Managing Director  of The  Center For  Church-Based
 Training, located  in  Dallas, Texas,  since  February  1999.   He  was  the
 President of Health Dental Plus, Inc. from  September 1993  to January 1999.
 Center  For  Church-Based  Training,  a  non-profit  organization,  provides
 advisory services to  churches and  other religious  organizations.   Health
 Dental Plus, Inc. is  engaged in the marketing  of dental benefits plans  to
 employer groups and individuals.

      Members of the Company's Board of Directors are elected to hold  office
 until the  next  meeting of  stockholders  and  until  their  successors are
 elected  and  qualified.  Officers  are  elected  to serve  subject  to  the
 discretion of the Board  of Directors until  their successors are  appointed
 and have qualified.

      The committees of the Company's Board of Directors are as follows:

           Audit Committee          V. John Mansfield, Chairman
                                    James Roberts

           Compensation Committee   James Roberts, Chairman
                                    V. John Mansfield
                                    Dr. Joseph W. Stucki

      The Company does not have a Nominating Committee.


  Compliance With Section 16(a) Of The Securities Exchange Act Of 1934

      Section 16(a) of the Securities Exchange Act of 1934 requires that  the
 Company's officers and directors, and persons who own more than ten  percent
 (10%) of a registered class of the Company's equity securities file  reports
 of ownership  and changes  in ownership  with  the Securities  and  Exchange
 Commission ("SEC") and with the exchange  on which the Company's  securities
 are traded. Such reporting persons are required by SEC regulation to furnish
 the Company with copies of all Section  16(a) forms so filed.  Based  solely
 on a review  of Forms 3,  4 and 5  and amendments thereto  furnished to  the
 Company pursuant to Rule 16a-3(e) promulgated under the Securities  Exchange
 Act of 1934, or  upon written representations received  by the Company,  the
 Company is aware of the following failures to file by reporting persons.

      (1) Dr. J. W. Stucki failed to file a Form 4 for the purchase
          of shares with a transaction value of $21,000
      (2) James Roberts, a Director, failed to file a Form 4 for the
          exercise of stock options with a transaction value of $8,000.
      (3) John Mansfield, a Director, failed to file a Form 4 for the
          exercise of stock options and  the sale of shares with a
          transaction value of $16,000.
      (4) John Stuecheli, CFO and Secretary, failed to file a Form 4
          for the exercise of stock options with a transaction value
          of $2,000.

 The individuals listed above  intend to file the  appropriate Form 5  before
 January 31, 2006.


 ITEM 10. EXECUTIVE COMPENSATION

                         Executive Compensation

      The following table sets forth information concerning all cash and non-
 cash compensation awarded  to, earned  by, or  paid to  the Company's  Chief
 Executive Officer  and Chief  Financial Officer  for the  last three  fiscal
 years.  No other executive officer of the Company who was serving at the end
 of fiscal 2005  earned more than  $100,000 of annual  base compensation  for
 services in all capacities to the Company and its subsidiaries.

<TABLE>
                    Summary Compensation Table
                                                             Long-Term Compensation
                                                             ------------------------
                               Fiscal Year     Annual        Restricted   Securities
  Name and Principal             Ending     Compensation       Stock      Under-lying     All other
    Position                  September 30    Salary ($)     Awards ($)   Options (#)  Compensation ($)
  --------------------------  ------------   -----------     -----------  -----------  ----------------
  <S>                           <C>           <C>            <C>           <C>           <C>
  Dr. Joseph W. Stucki          2005        262,950 (1)      $25,000 (5)                 $25,000 (5)
  Chairman of the Board,        2004        262,950 (2)
  President and                 2003        262,950 (3)      150,000 (4)
  Chief Executive Officer

  John C. Stuecheli             2005        113,000
  Vice President, Chief         2004         94,000
  Financial Officer             2003         90,500
  and Secretary
 ___________________________

   (1) Dr. Stucki deferred $58,000 in compensation.

   (2) Dr. Stucki deferred $111,000 in compensation.

   (3) Dr. Stucki deferred $211,000 in compensation.

   (4) Per the three year employment agreement ended September 30, 2003,
       Dr. Stucki was issued 15,000,000 shares of restricted common stock
       at $0.01 per share, which was the average price for the period of
       the agreement.

   (5) On October 1, 2003, the three year employment, which ended September
       30, 2003, was extended to September 30, 2005.  On October 1, 2004, Dr.
       Stucki was awarded $25,000 in additional compensation and was issued
       1,250,000 shares of restricted stock at $0.02 per share, which was the
       price at September 30, 2004.  The award was consideration for Dr.
       Stucki extending the employment contract.

</TABLE>

                    Stock Option and Stock Purchase Plans

      The following tables  set forth the  number of options  granted to  the
 Company's Chief Executive Officer and Chief Financial Officer during  fiscal
 2005 and the value of the unexercised options held by them at September  30,
 2005.

                    Option/SAR Grants in Last Fiscal Year
                    -------------------------------------

                          Number of      % of
                         Securities      Total
                           Under-      Options/
                            lying        SARs
                          Options/      Granted    Exercise
                            SARs          to        or Base
                           Granted     Employees     Price     Expiration
   Name                      (#)     In Fiscal Year  ($/Sh)       Date
  --------------------   -----------  ------------   -----     -----------

                            None to report.

 ___________________



              Aggregate Option/SAR Exercises in Last Fiscal Year
              --------------------------------------------------
                  And Fiscal 2005 Year-End Option/SAR Values
                  ------------------------------------------

                                                   Number of
                                                   Securities      Value of
                                                   Underlying      Unexercised
                                                   Unexercised     In-the Money
                                                   Options/SARs    Options/SARs
                           Shares                  At FY-End (#)   At FY-End ($)
                          Acquired     Value
                        On Exercise   Realized     Exercisable/     Exercisable/
   Name                     (#)         ($)       Unexercisable    Unexercisable
  --------------------  ------------  --------    --------------   -------------

  Dr. Joseph W. Stucki      None        None         None               None

  John C. Stuecheli        42,500       $850         None               None

 ____________________


                            Employee Benefit Plans

 In August 1995, the Company adopted its 1995 Employee Stock Option Plan (the
 "1995 Employee Plan") under which options to purchase shares of Common Stock
 may be issued  to employees  and consultants of  the Company.   The  Company
 reserved 1,000,000 shares of  Common Stock for  issuance under the  Employee
 Plan.  Also  in  August  1995, the  Company  adopted the  1995  Non-Employee
 Director Stock Option Plan (the "1995 Director Plan") which provides for the
 grant of options to directors of up to 250,000 shares that do not qualify as
 "incentive  stock  options" under  the Internal  Revenue Code  of  1986.  In
 addition, the Company  adopted its 1995  Employee Stock  Purchase Plan  (the
 "Stock Purchase Plan"), effective October 1, 1995, which allows employees to
 acquire Common Stock of  the Company at  85% of its  fair market value  from
 payroll deductions received from the employees.  The Company has reserved  a
 total of 250,000 shares of its Common Stock to be sold to eligible employees
 under the Stock  Purchase Plan.   In October  1996, the  Board of  Directors
 amended each of the Employee Plan, the Director Plan, and the Stock Purchase
 Plan to clarify various matters concerning the administration of such plans.
  In July  1997, the  Company adopted  its 1997  Executive Stock  Bonus  Plan
 ("Executive Stock Bonus  Plan") under which  options to  purchase shares  of
 Common Stock  may  be issued  to  employees of  the  Company.   The  Company
 reserved 260,870 shares  of Common Stock  for issuance  under the  Executive
 Bonus Plan.   The following table  presents the number  of shares issued  or
 options granted  under  each of  the  Plans as  of  September 30,  2005:  In
 February 2005, the  Company adopted its  2005 Stock Option  Plan (the  "2005
 Plan")  and  filed a Form S-8 to  register 5,000,000 shares of common stock.
 The 2005 Plan provides for the grant of incentive stock options to employees
 and the grant of non-qualified options to directors.


                                      Options
                                  Granted/Shares       Option Shares
        Plan                          Issued             Exercised
    -------------                     -------            ---------

 1995 Employee Plan                   977,500              977,500

 1995 Director Plan                   250,000              250,000

 Stock Purchase Plan                        0                    0

 Executive Stock Bonus Plan           190,475                    0

 2005 Plan                          2,290,000              100,000


                          Compensation of Directors

      The Company  pays  its Directors  $1,500  for each  Board  of  Director
 meeting attended in person and $250 for each  telephonic Board meeting.  The
 Company pays  its  Directors  $350  for  Audit  and  Compensation  Committee
 meetings.  The Company reimburses all Directors for reasonable out-of-pocket
 expenses incurred in connection  with attending meetings.   Pursuant to  the
 Director Plan, all non-employee directors receive, at the beginning of  each
 fiscal year, a 5-year option to purchase 50,000 shares of common stock at an
 exercise  price determined by the Board  of  Directors at the time of grant.
 Also, pursuant to the Director Plan, all employee directors receive, at  the
 beginning of each fiscal year, a 5-year option to purchase 20,000 shares  of
 common stock at an  exercise price determined by  the Board of Directors  at
 the time of grant.  In November 2004, options to purchase 50,000 shares were
 granted  to  non-employee  directors  under  the  1995  Director  Plan.  The
 exercise price was $0.01 per share.  In February 2005, options  to  purchase
 250,000 shares were  granted  to non-employee directors under the 2005 Plan.
 The exercise price ranged from $0.01 to $0.02.


                            Employment Agreements

      Effective October  1,  2000,  the Company  entered  into  a  three-year
 employment agreement with  Dr. Joseph W.  Stucki to serve  as President  and
 Chief Executive  Officer  of  the  Company for  an  annual  base  salary  of
 $250,000.  Dr.  Stucki is also  entitled to a  car allowance  of $1,000  per
 month and reimbursement of up to $1,500 per year for continuing professional
 education.   As  consideration   for  renewing  the  contract,  he  received
 5,200,000 shares of  common stock.  On September 30,  2003,  he was  awarded
 15,000,000 shares of  common stock, which  was equivalent to  $150,000 at  a
 share price of $0.01.  In the event of termination of the agreement for  any
 reason by the Company or Dr. Stucki, he will be entitled to a severance  pay
 equal to twelve months of his full salary.  After a change of control of the
 Company, as defined in the employment agreement, if Dr. Stucki's  employment
 is terminated,  he terminates  his employment,  his  duties are  changed  or
 certain other  specified  events  take  place, he  will  be  entitled  to  a
 severance payment equal to twice his effective annual compensation, together
 with a continuation of  all employee benefits for  two years.  On October 1,
 2003, the  three  year  employment, which  ended  September  30,  2003,  was
 extended to September 30, 2005.  On October 1, 2004, Dr. Stucki was  awarded
 $25,000 in  additional  compensation  and was  issued  1,250,000  shares  of
 restricted stock at $0.02  per share, which was  the price at September  30,
 2004.  The award was consideration  for Dr. Stucki extending the  employment
 contract.

      Effective  October 1, 2005,  the  Company  entered  into  a  three-year
 employment agreement with  Dr. Joseph W.  Stucki to serve  as President  and
 Chief Executive  Officer  of  the  Company for  an  annual  base  salary  of
 $250,000.  Dr.  Stucki is also  entitled to a  car allowance  of $1,000  per
 month and reimbursement of up to $1,500 per year for continuing professional
 education. . For the year ended September 30, 2006, Dr. Stucki shall receive
 a performance bonus derived from the  percentage increase in net revenue  in
 fiscal 2006 compared to fiscal  2005.  For example,  if the increase in  net
 revenue is  15%,  then the  performance  bonus shall  be  $37,500  ($250,000
 multiplied by  15%).The  calculation,  derived from  the  audited  financial
 statements, shall be  approved by the  Compensation Committee  and shall  be
 payable on December 31, 2006.   For the years  ended September 30, 2007  and
 2008, the  performance shall  continue to  be  derived from  the  percentage
 increase in net revenue.  In the  event of termination of the agreement  for
 any reason by the Company or Dr. Stucki, he will be entitled to a  severance
 pay equal to twelve months of his full salary.  After a change of control of
 the Company,  as  defined  in the  employment  agreement,  if  Dr.  Stucki's
 employment is  terminated,  he terminates  his  employment, his  duties  are
 changed or certain other specified events take place, he will be entitled to
 a severance  payment  equal  to twice  his  effective  annual  compensation,
 together with a continuation of all employee benefits for two years.


 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth  information regarding the ownership  of
 the Company's  Common Stock  as of  December  31, 2005,  by (i)  each  known
 beneficial owner of more  than five percent (5%)  of the outstanding  Common
 Stock, (ii)  each  Director, (iii)  each  executive officer,  and  (iv)  the
 executive officers and  Directors as  a group.   The table  also sets  forth
 information regarding  the ownership  of the  Company's Series  B  Preferred
 Stock,  which  is  convertible  into  Common Stock.  All share  numbers  are
 provided  based  on  information  supplied  to  management of the Company by
 the  respective individuals  and  members  of the  group.  Unless  otherwise
 indicated, each of  the stockholders has  sole voting  and investment  power
 with respect to the shares beneficially owned.

                                          Common Stock     Series B Preferred
                                                               Stock (8)
                                       Number of  Percent  Number of  Percent
                                        Shares   of Class   Shares   of Class
                                       --------- --------  --------- --------
   David P. Voracek, D.C. (1)          5,748,636    5.2%     7,000    50.45%
   2025 Tartan Trail
   Highland Village, Texas 75077

   Joseph W. Stucki, D.C. (2)         45,547,453   40.8%     4,375    31.50%
   7350 Hawk Road
   Flower Mound, Texas 75022

   Jeffrey Jones, D.C. (3)             6,681,921    6.6%     2,500    18.05%
   807 S. Carrollton Avenue
   New Orleans, Louisiana 70118

   John C. Stuecheli (4)                 819,500       *
   7350 Hawk Road
   Flower Mound, Texas 75022

   Michael R. Smith, M.D. (5)            371,167       *
   118 Canyon Circle
   Boerne, Texas 78006

   James Roberts (6)                     259,500       *
   6712 Biltmore Pl.
   Plano, Texas 75023

   V. John Mansfield (7)                       -       *
   10956 Big Canoe
   Big Canoe, Georgia 30143

   Officers and Directors as a        52,710,041   48.7%   13,875     100%
   group (6 persons)
 __________________________

   *Less than one percent.


 (1)  The number of shares reported includes  614,800 shares owned of  record
      by Mainstream Enterprises  LLC, a limited  liability company, in  which
      Dr. Voracek has a 50% member interest.

 (2)  Dr. Stucki is the  Chief Executive Officer,  President and Chairman  of
      the Board of Directors of the Company.

 (3)  Dr. Jones is a Director of the Company.

 (4)  Mr. Stuecheli  is the  Chief Financial  Officer  and Secretary  of  the
      Company.

 (5)  Dr. Smith is a Director of the Company.

 (6)  Mr. Roberts is a  Director of the Company.  The number of shares  owned
      includes 150,000 shares  issuable upon  exercise of  options at  $0.01-
      $0.02 per share, which are currently exercisable.

 (7)  Mr. Mansfield is a Director of the Company.

 (8)  On September  30,  2004, the  Company  issued $2,000,000  of  Series  B
      Preferred Stock, which has the following terms: (i) face value of $100,
      (ii) 4%annual dividend,  (iii) convertible into  common stock at  $0.05
      per share  or higher,  (iv) automatic  call conversion  if share  price
      exceeds $0.20, (v) redeemable for cash up to $250,000 per year for  two
      years if net income exceeds $500,000 and (vi) automatic put  conversion
      on September 30, 2007 at $0.025 per share.  Dr. Stucki converted  4,375
      shares of  Series B  Preferred Stock  into 5,468,750  shares of  common
      stock.  Dr. Voracek converted 1,750 shares of Series B Preferred  Stock
      into 1,682,692 shares of common stock.


 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Belair Capital  Group,  Ltd.  ("Belair"), a  Nevada  limited  liability
 company, is the holder of a $837,500 note payable issued in connection  with
 the acquisition of  three clinics in  September 2000.   The note payable  of
 $837,500 is the sole asset of  Belair.  The following shareholders are  also
 members of Belair: Dr. J.W. Stucki (51% member interest), Dr. Jeffrey  Jones
 (19% member interest) and Dr. David Voracek (30% member interest).

      On September 30, 2004,  The Company sold its  Uptown clinic located  in
 New Orleans to Dr. Jones.   The sales price  was $310,000, of which  $96,000
 was a note payable from the  director with 24 equal monthly installments  in
 the amount of $4,000,  $122,000 paid through  the extinguishment of  certain
 notes payable  and other  obligations of  the Company  to the  director  and
 $92,000 paid through the return and cancellation of 3,600,000 shares of  the
 Company's common stock owned by the director with a share price of $0.025.
 The sales price approximated the net asset value at September 20, 2004.

 From January 31, 2003 to December 31, 2005, the corporate office was located
 in a building leased from Dr. J.W. Stucki.  The monthly rent was $2,200  per
 month.


 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

      (a)  Exhibits Required by Item 601

      (1)  The following financial statements are filed herewith in Item 7

           (i)   Consolidated Balance sheet as of September 30, 2005
           (ii)  Consolidated Statements of Operations for the years ended
                 September 30, 2005 and 2004.
           (iii) Consolidated Statements of Stockholders' Equity for
                 the years ended September 30, 2005 and 2004.
           (iv)  Consolidated Statements of Cash Flows for the years ended
                 September 30, 2005 and 2004.
           (v)   Notes to Consolidated Financial Statements.

      (2)
           2.1  Debtors American HealthChoice, Inc. and AHC Physicians
                Corp., Inc. Amended Joint Plan of reorganization dated
                March 31, 2000 (incorporated by reference to Exhibit 2.1
                to Current Report on Form 8-K dated September 25, 2000).

           3.1  Certificate of Incorporation of American HealthChoice,
                Inc. (incorporated by reference to Exhibit 4.1 to
                Registration Statement on Form SB-2, Registration
                Number 33-09311, filed on July 31, 1996)

           3.2  Certificate of Amendment to Certificate of Incorporation
                of American HealthChoice, Inc. (incorporated by reference
                to Exhibit 3.2 to Form 10-KSB, file number 000-26740,
                filed for the fiscal year ended September 30, 1996).

           3.3  Bylaws of American HealthChoice, Inc. (incorporated by
                reference to Exhibit 3.3 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                1996).

           4.1  Form of Debenture for $3,385,000 of 8% convertible
                debentures due August 24, 2001 (incorporated by reference
                to Exhibit (c)(ii) to Current Report on Form 8-K dated
                August 24, 1998).

           4.2  Form of Subscription Agreement between the Registrant and
                the holders of the debentures referenced in Exhibit 4.1
                (incorporated by reference to Exhibit (c)(ii) to Current
                Report on Form 8-K dated August 24, 1998).

           4.3  Form of Security Agreement entered into between the
                Registrant and the holders of the debentures referenced
                in Exhibit 4.1 (incorporated by reference to Exhibit
                (c)(ii) to Current Report on Form 8-K dated August 24,
                1998).

           4.4  Form of Registrations Rights Agreement between the
                Registrant and the holders of the debentures referenced
                in Exhibit 4.1 (incorporated by reference to Exhibit
                (c)(ii) to Current Report on Form 8-K dated August 24,
                1998).

           4.5  Security Agreement dated August 19, 2000 between American
                HealthChoice, Inc. and Southridge Capital LLC in its capacity
                as collateral agent for Sovereign Partners, L.P., Dominion
                Capital Fund, Ltd., Canadian Advantage Limited Partnership,
                and Atlantis Capital Fund. (incorporated by reference to
                Exhibit 4.1 to Current Report on Form 8-K dated September 25,
                2000).

           4.6  8% Senior Secured Convertible Debenture due August 19, 2003.
                (incorporated by reference to Exhibit 4.2 to Current Report
                on Form 8-K dated September 25, 2000).

           4.7  Stock Trust and Escrow Agreement entered into as of August
                19, 2000 by and between American HealthChoice, Inc.,
                Sovereign Partners, L.P., Dominion Capital Fund, Ltd.,
                Canadian Advantage Limited Partnership, Atlantis Capital Fund
                and Krieger & Prager, LLP. (incorporated by reference to
                Exhibit 4.3 to Current Report on Form 8-K dated September 25,
                2000).

           4.8  Series B Preferred Stock terms and condition as of September
                30, 2004. (incorporated by reference to Exhibit 4.8 to Form
                10-KSB file number 000-26740 for the fiscal year ended
                September 30, 2004)

          10.3  1995 Non-Employee Director Stock Option Plan (incorporated
                by reference to Exhibit 10.1 to Form10-QSB, file number
                33-30677-NY, filed for the quarter ended June 30, 1995).

          10.4  1995 Employee Stock Purchase Plan (incorporated by
                reference to Exhibit 10.3 to Form 10-QSB, file number
                33-30677-NY, filed for the quarter ended June 30, 1995).

          10.5  1995 Employee Stock Option Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.8 to Form 10-QSB,
                file number 000-26740, filed for the quarter ended June
                30, 1995).

          10.6  1995 Non-Employee Director Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.9 to Form
                10-KSB, file number 000-26740, filed for the fiscal
                year ended September 30, 1996).

          10.7  1995 Employee Stock Purchase Plan Amendment 1996-1.
                (incorporated by reference to Exhibit 10.10 to Form
                10-KSB, file number 000-26740, filed for the fiscal
                year ended September 30, 1996).

          10.8  1997 Consultant Stock Plan, (incorporated by reference
                to Form S-8 file number 333-26065, filed for the quarter
                ended March 31, 1997).

          10.9  1997 Consultant Stock Plan, (incorporated by reference
                to Form S-8 file number 333-35581, filed for the quarter
                ended September 30, 1997).

          10.10 1997 Executive Bonus Plan, (incorporated by reference to
                Form S-8 file number 333-36475, filed for the quarter ended
                September 30, 1997).

          10.13 Employment Agreement for Chief Executive Officer dated
                June 1, 1997 between American HealthChoice, Inc. and
                Dr. Wes Stucki (incorporated by reference to Exhibit
                10.13 to Form 10-KSB, file number 000-26740, filed for
                the fiscal year ended September 30, 1998).

          10.14 Asset Purchase Agreement dated February 12, 1999 between AHC
                Physicians Corporation and Georgia Clinic LLC (incorporated
                by reference file number 000-26740, filed for the fiscal
                quarter ended March 31,1999).

          10.15 Demand Note dated June 10, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated
                by reference to Exhibit 10.15 to Form 10-KSB, file
                number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.16 Demand Note dated June 25, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.16 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                1999).

          10.17 Demand Note dated April 30, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.17 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.18 Demand Note dated May 25, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.18 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.19 Demand Note dated May 10, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.19 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.20 Demand Note dated June 15, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.20 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.21 Demand Note dated July 1, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.21 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.22 Demand Note dated July 10, 1999 between American
                HealthChoice, Inc. and Mainstream Enterprises, LLC
                (incorporated by reference to Exhibit 10.22 to Form 10-KSB,
                file number 000-26740, filed for the fiscal year ended
                September 30, 1999).

          10.23 Demand Note dated August 8, 1999 between American
                HealthChoice, Inc. and Dr. J. W. Stucki (incorporated by
                reference to Exhibit 10.23 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                1999).

          10.24 Asset Sale and Purchase Agreement dated September 1, 2000 by
                and between Acme Corpus Chiropractic Clinic, LLC, Laredo
                Family Enterprises, LLC, Acme Chiropractic Clinic, LLC and
                American HealthChoice, Inc. (incorporated by reference to
                Exhibit 10.24 to Form 10-KSB, file number 000-26740, filed
                for the fiscal year ended September 30, 2000).

          10.25 Loan Agreement dated September 1, 2000 between Belair
                Capital, Ltd. and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.25 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.26 Employment Agreement effective October 1, 2000 between Dr.
                J. W. Stucki and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.26 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.27 Employment Agreement effective October 1, 2000 between Dr.
                Jeffrey Jones and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.27 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

           10.28 Employment Agreement effective October 1, 2000 between John
                C. Stuecheli and American HealthChoice, Inc. (incorporated
                by reference to Exhibit 10.28 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.29 Laredo Family Enterprises, LLC Financial Statements for
                the twelve months ended December 31, 1999 (incorporated
                by reference to Exhibit 10.29 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.30 San Benito Chiropractic Clinic, LLC Financial Statements for
                the twelve months ended December 31, 1999 (incorporated by
                reference to Exhibit 10.30 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.31 Acme Corpus Chiropractic Clinic, LLC Financial Statements
                for the twelve months ended December 31, 1999 (incorporated
                by reference to Exhibit 10.31 to Form 10-KSB, file number
                000-26740, filed for the fiscal year ended September 30,
                2000).

          10.32 Employment Agreement effective October 1, 2005 between Dr,
                J. W. Stucki and American HealthChoice, Inc.*

          21    List of Subsidiaries of American HealthChoice, Inc.*

          23.1  Consent of Independent Registered Public Accounting Firm*

          31.1  Certification pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002 for Dr. J. W. Stucki, President and Chief
                Executive Officer*

          31.2  Certification pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002 for John C. Stuecheli, Vice President and Chief
                Financial Officer*

          32.1  Certification pursuant to 18 U.S.C Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
                Dr. J. W. Stucki, President and Chief Executive Officer*

          32.2  Certification pursuant to 18 U.S.C Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for
                John C. Stuecheli, Vice President and Chief Financial
                Officer*

      * Filed herewith



                               SIGNATURES

      In accordance with Section 13 or  15(d) of the Securities Exchange  Act
 of 1934, the Registrant caused this Report to be signed on its behalf by the
 undersigned, thereunto duly authorized.



                               AMERICAN HEALTHCHOICE, INC.


 Date: January 13, 2006        By:  /s/ Dr. J.W. Stucki
                                        Dr. J.W. Stucki, Chief Executive
                                        Officer and President

      In accordance with the Securities Exchange Act of 1934, this Report has
 been signed below by the following  persons on behalf of the Registrant  and
 in the capacities and on the dates indicated.

 Signature                          Title                           Date
 -------------------      ----------------------------------  -----------------

 /s/ Dr. J.W. Stucki      Chief Executive Officer, President
     Dr. J.W. Stucki      and Chairman of the Board
                          (Principal Executive Officer)       January 13, 2006

 /s/ John C. Stuecheli    Chief Financial Officer and
     John C. Stuecheli    Vice President-Finance
                          (Principal Financial and
                          Accounting Officer)                 January 13, 2006

 /s/ V. John Mansfield    Director, Chairman of Audit
     V. John Mansfield    Committee                           January 13, 2006

 /s/ James Roberts        Director
     James Roberts                                            January 13, 2006

 /s/ Dr. Jeff Jones       Director
     Dr. Jeff Jones                                           January 13, 2006

 /s/ Dr. Michael Smith    Director
     Dr. Michael Smith                                        January 13, 2006